Indal buys 51% in Suvas Holdings

Aditya Birla Group company - Indian Aluminium Company (Indal) - has acquired a 51 per cent equity stake in Suvas Holdings, an outfit specialising in power projects. The objective of the acquisition is to set up hydel power plants in Maharashtra as and when opportunities arise.

Confirming the development, the Aditya Birla Group spokesperson told Business Standard : "We have acquired a 51 per cent stake in Suvas Holdings so that we can have capitve power for our plants at Taloja and Kalwa. As and when power projects come up in Maharashtra, we will bid for these projects through Suvas Holdings."

Indal has bought the 51 stake in Suvas Holdings from Lakshmi Organic Industries "" a chemical manufacturing company. The exact acquisition cost is not known but sources said it could be as low as Rs 1-2 crore. Lakhmi Organic's stake in Suvas has declined to 49 per cent after the acquisition.

"Power constitutes a major portion of the production costs. Therefore, with captive power, our total production costs are expected to come down by around 30 - 40 per cent," senior company executives at Indal said.

Aditya Birla Group had bought 76 per cent stake in Indal for a little over Rs 1,000 crore from Alcan, after which Indal was to be merged with the group's flagship - Hindalco.

However, due to steep stamp duty, the merger proposal was shelved and Hindalco increased its stake in Indal to 96 per cent.