Aditya Birla Finance and Aditya Birla Capital Merger Approved; Strengthening Financial Position

Aditya Birla Capital Ltd. has declared that the merger between Aditya Birla Finance Ltd., a subsidiary, and Aditya Birla Capital, the parent company, has been approved. The board of directors’ approval of this action represents a critical turning point in the development of both organizations and is expected to have a substantial impact on the financial industry in India.

Aditya Birla Finance, a non-deposit taking systematically significant NBFC (NBFC-ICC), is scheduled to be absorbed by its wholly-owned subsidiary, Aditya Birla Capital, a listed systemically important non-deposit taking core investment company (NBFC-CIC) that manages assets valued at an astounding Rs 4.1 lakh crore. This combination is more than just the joining of two companies; rather, it is a strategic realignment with the goals of improving operational effectiveness, simplifying regulatory compliance, and releasing synergies to promote long-term development.

The proposed merger is expected to simplify and reduce the number of legal entities in Aditya Birla Capital’s corporate structure. Following completion, Aditya Birla Capital will become an operational NBFC instead of a holding company, forming a single, sizable organization with improved flexibility and financial strength. With direct access to finance made possible by this change, the business will be able to take full advantage of possibilities by allocating and using resources more effectively.

The firm said that the combination would result in the consolidation of companies and operational synergies, promoting expansion and long-term sustainable development. This alignment of strategy has the potential to provide value for many stakeholders while maintaining regulatory compliance. It is also expected to lessen the variety of legal and regulatory compliances and enable the smooth implementation of policy changes.

Complying with the Reserve Bank of India’s (RBI) Scale-based Regulations, which require Aditya Birla Finance to be listed by September 30, 2025, is one of the merger’s key consequences. The company’s dedication to following governance guidelines and legal frameworks is emphasized by this strategic alignment, which bolsters investor confidence.

“The planned merger will give Aditya Birla Capital a solid financial foundation on which to expand its operations and take part in India’s economic development, thereby enabling it to carry out its mission of enabling millions of Indians to achieve their financial goals.” Chairman of the Aditya Birla Group, Kumar Mangalam Birla, said that this feeling “underlines the strategic rationale behind the merger and the broader vision to contribute to India’s economic development.”

Subject to regulatory clearances, Vishakha Mulye will become the Managing Director and Chief Executive Officer (CEO), and Rakesh Singh will become the Executive Director and CEO (NBFC) when the plan goes into force. This change in leadership represents a smooth continuation of the combined company’s growth plan and vision.

As of December 31, 2023, Aditya Birla Capital was managing assets of over Rs 4.1 lakh crore. With a total written premium of Rs 13,500 crore in the life and health insurance industries, its lending AUM was Rs 115,139 crore. For the nine months that ended in FY 2024, the business recorded consolidated sales of Rs 26,791 crore and profit after tax of Rs 2,090 crore. With 1,462 branches across all industries and a pan-Indian presence, Aditya Birla Capital is well positioned to take advantage of new possibilities and promote equitable development in a variety of economic sectors.

Aditya Birla Capital and Aditya Birla Finance’s merger is a calculated action meant to improve India’s financial environment. The combination is expected to provide long-term value for stakeholders, foster sustainable growth, and unleash synergies while advancing India’s economic development trajectory by becoming a single, more capable organization.