Aditya Birla Capital gets RBI approval for merger with Aditya Birla Finance

Aditya Birla Capital has been given the go-ahead by the Reserve Bank of India to combine its fully owned subsidiary Aditya Birla Finance Limited with itself to form a sizable, consolidated NBFC. 

“The company and amalgamating company have received letters dated 18 September 2024 from the Reserve Bank of India (RBI), whereby the RBI has accorded its ‘no objection’ for the Scheme,” Aditya Birla Capital stated in a regulatory filing.

It is anticipated that the combination will improve shareholder value creation, operational synergies, and capital availability. In a statement, Aditya Birla Finance claimed to be the first top layer NBFC to outline a clear plan for adhering to the RBI’s scale-based restrictions.

The stock exchanges were notified by the firm board that the merger had been approved earlier in March of this year. Later, on July 02, 2024, it received an observation letter from the BSE with “no adverse observations” and an observation letter from the NSE with “no objection.”

Earlier, Kumar Mangalam Birla, Chairman, Aditya Birla Group, had said, “Our financial services business has scaled smartly to emerge as a core growth engine for the Aditya Birla Group. The proposed amalgamation will create a strong capital base for Aditya Birla Capital to grow its business and participate in India’s growth story, successfully fulfilling its commitment to empower the financial aspirations of millions of Indians.”

The business will now get in touch with NCLT to finish the merger procedure. The National Company Law Tribunal, other relevant authorities, and the individual shareholders and creditors of the companies involved in the Scheme, as may be necessary, are among the statutory and regulatory approvals that the scheme is still subject to.

Aditya Birla Capital oversees about Rs 4.1 lakh crore in total assets under management as of December 31, 2023, with Rs 1,15,139 crore in total lending AUM and Rs 13,500 crore in gross written premium in life and health insurance sectors.