Promoter holding in Aditya Birla Nuvo to rise to 38.72%

Rs 90 crore gain seen in market capitalisation

Aditya Birla Nuvo, the proposed new avatar of Indian Rayon & Industries after the merger of Indo Gulf Fertilisers and Birla Global Finance with itself, will continue to be the third largest group company in the Aditya Birla Group with sales exceeding Rs 3,980 crore, net profit over Rs 150 crore and a net worth in excess of Rs 1,825 crore.

The cash flow of the new entity will rise to Rs 293 crore and net profit will be around Rs 174 crore.

The estimates are based on the financial performance of Indian Rayon, Indo Gulf Fertilisers and Birla Global Finance for the year ended March 2005.

At one stroke, promoters' holding in the new company would rise to 38.72 per cent. As on June 30, 2005, promoters' holding in Indian Rayon was 28.64 per cent. It was 58.22 per cent in Indo Gulf Fertilisers and 74.88 per cent in Birla Global Finance. The total number of shareholders in the consolidated entity would be more than 1.75 lakh.

The total market capitalisation of the combined entity would be around Rs 4,605 crore. With the increase in shareholding in the new company, the promoters will gain Rs 90 crore worth market capitalisation. The share of market cap will go up from Rs 1,693 crore to Rs 1,783 crore after the merger.

After the merger of Indo Gulf Fertilisers and Birla Global Finance with Indian Rayon, the business mix of the new company "" Aditya Birla Nuvo - would be expanded from garments, viscose filament yarn, spun yarn and carbon black to fertilisers and finance.

Fertilisers would be the largest revenue earner for the new company with a total revenue kitty of Rs 675 crore, followed by carbon black (Rs 500 crore), garments (Rs 476 crore), spun yarn (Rs 379 crore) and filament yarn (Rs 284 crore).

Indian Rayon was incorporated in 1956. After merging Jayshree Textiles & Industries, the company became a leader in segments of viscose filament yarn, carbon black, insulators and branded apparels ""- both in India and internationally.

Under the name of Idea Cellular, the company enters the telecom segment by joining hands with the Tata group. It is operating in seven states in India with a market share of 11 per cent.

During 1988, Indian Rayon forayed into Carbon Black and Hi Tech Carbon (Renukoot) went on stream. Production commenced at Hi Tech Carbon's second carbon black plant at Gummidipoondi during 1999. The company is expanding the carbon black division at Gummidipoondi near Chennai at a capital outlay of Rs.60 crore.

On completion of the project, the carbon black capacity would be enhanced by 40000 tonne from 110,000 tonne to 150,000 tonne.

The company also made its entry into readymade garments business with the acquisition of Madura Garments. This has brought in renowned brands such as Van Heusen, Louis Phillipe, Allen Solly, Peter England, Byford and San Frisco under the company's fold.

The company's Insurance subsidiary "" Birla Sunlife Insurance Company "" commenced operations in March 2001. It also ventured into the information technology sector by acquiring 70.35 per cent stake in PSI Data Systems.

The company has forayed into the business process outsourcing business by acquiring 100 per cent stake in TransWorks in July 2003.

TransWork has expertise in customer care, transaction processing and financial accounting processing. TransWork has a ready customer base of several Fortune 500 companies and has centres at Mumbai and Bangalore.

In 1998, Indian Rayon's cement business was transferred to the group flagship Grasim Industries as part of the consolidation of its cement business.

In 1999-2000, the company exited from the sea water magnesia business. The company has transferred its insulator business to a joint venture company "" Birla NGK Insulators Pvt Ltd "" through a scheme of arrangement. The JV partner is NGK Industries of Japan. It become operational in February 2003.