In announcing the scheme, Kumar Mangalam Birla, chairman of the Aditya Birla Group, said: “The proposed restructuring will create one of India’s largest and well-diversified companies, with a healthy mix of businesses, with steady cash flows and long-term growth opportunities. With diverse businesses spanning manufacturing and services, the combined company provides a play on India’s growth story. The demerger and listing of the financial services business will unlock value for shareholders.”
Premji Invest, private equity investment fund of Wipro chairman Azim Premji, bought a 2.2 per cent stake in ABCL for around Rs 700 crore. ABCL will issue 48 milion preferential shares at Rs 145.4 each to PI Opportunities Fund, an affiliate of Premji Invest.
“The recent value discovery of ABCL has unlocked value for Grasim. Valuing the standalone entity at eight times the FY19 estimated profit after tax and stakes in UltraTech Cement, ABCL, Idea and others at a 40 per cent holding company discount to our fair value estimates, we maintain a 'buy' (rating), with a target price of Rs 1,420. Excluding ABCL, the target will get revised down to Rs 1,233/share," analysts at Edelweiss had said in a report after this development.