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Aditya Birla Nuvo gains after selling 23% stake in life insurance to Sun Life

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Capital Market
Last Updated : Dec 03 2015 | 10:28 AM IST

Aditya Birla Nuvo rose 1.36% to Rs 2,147 at 9:29 IST on BSE after the company said it will sell 23% stake in life insurance to Canada-based Sun Life Financial for Rs 1664 crore, valuing the company at Rs 7235 crore.

The announcement was made after market hours yesterday, 2 December 2015.

Meanwhile, the BSE Sensex was down 63.19 points, or 0.24%, to 26,054.66.

On BSE, so far 2,535 shares were traded in the counter, compared with an average volume of 11,146 shares in the past one quarter.

The stock hit a high of Rs 2,149.95 and a low of Rs 2,128.35 so far during the day. The stock hit a 52-week high of Rs 2,340.10 on 7 August 2015. The stock hit a 52-week low of Rs 1,518.70 on 27 April 2015.

The stock had outperformed the market over the past one month till 2 December 2015, rising 3.06% compared with 1.66% decline in the Sensex. The scrip had also outperformed the market in past one quarter, rising 7.38% as against Sensex's 2.61% rise.

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The large-cap company has an equity capital of Rs 130.16 crore. Face value per share is Rs 10.

Aditya Birla Nuvo (ABNL) announced that Sun Life Financial (Sun Life) will increase its stake in the life insurance joint venture, Birla Sun Life Insurance (BSLI) from 26% to 49% at an investment of Rs 1664 crore, subject to the requisite approvals.

ABNL has entered into an agreement with the Canadian insurance major Sun Life to sell approximately 43.70 crore equity shares constituting 23% of the issued and paid up equity share capital of BSLI. On completion of the transaction, Sun Life's stake in BSLI will increase from current 26% to 49% while ABNL will continue to hold the controlling stake at 51%. The 23% stake sale will fetch ABNL Rs 1664 crore, valuing BSLI at Rs 7235 crore. The transaction is expected to be completed by the end of the fiscal year ending March 2016, subject to the customary closing conditions and the requisite statutory and regulatory approvals in India and Canada, ABNL said.

On a consolidated basis, net profit of Aditya Birla Nuvo declined 8.41% to Rs 414.04 crore on 11.49% rise in net sales to Rs 7237.88 crore in Q2 September 2015 over Q2 September 2014.

Aditya Birla Nuvo (ABNL) is a $4.4 billion premium conglomerate operating in the services and the manufacturing sectors, where it commands a leadership position.

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First Published: Dec 03 2015 | 9:30 AM IST

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