Aditya Birla group eyes pension funds business

Textiles, telecom, IT and financial services seen as growth drivers.

The Rs 33,000 crore Aditya Birla group has identified four high-growth business segments. The four areas are textiles, telecom, infotech and financial services. The four vehicles for growth include Madura Garments, Idea Cellular, Transworks and Birla Sunlife Insurance.

Training its sight on value and high-growth business areas, Aditya Birla Nuvo, the new avatar of Indian Rayon, is keen on entering pension funds business and financial services.

"Pension funds is an opportunity waiting to happen. We are keen on entering the pension funds business in India," Kumar Mangalam Birla, chairman, the Aditya Birla group, told Business Standard.

He also said the group would foray into banking as and when the regulator permits a corporate entity to do so. "Right now we cannot float a bank, as the regulations do not permit us (to do so). We will certainly look into it as and when we get an opportunity," Birla said.

Apart from the four high-growth areas, the group has identified fertilisers, viscose filament yarns, insulators and carbon black as value businesses.

Value businesses are the ones that have been growing at 8-9 per cent per annum, while the high-growth segments have been registering a double-digit growth every year.

Between 2001 and 2005, the group has deployed Rs 764 crore cumulative cash from its value businesses into high-growth businesses to drive its growth.

With a view to expanding its presence in the high-growth garment segment, the group plans to launch new lifestyle and full wardrobe brands and enter into strategic tie-ups with leading global brands, a company official said.

The branded menswear market has been growing at 15 per cent annually and is likely to touch $3.3 billion by 2010. The group has targeted to double the retail space in three years.

As the business process outsourcing (BPO) market is expected to grow three-fold to $15.5 billion by 2008, the Aditya Birla group would scale up its BPO outfit, Transworks, through diversification.

Idea Cellular, the group's telecom venture, would also be a priority area, the official said. While the group holds 50.2 per cent in the telecom venture, Indian Rayon's shareholding in Idea Cellular would be 20.7 per cent.