Aditya Birla Nuvo tumbled 18.31% to Rs 1,279 at 10:26 IST on BSE after the boards of the company and Grasim Industries announced the merger of Aditya Birla Nuvo with the latter as part of a composite Scheme of Arrangement.
Shares of Grasim Industries were off 1.25% at Rs 4,482.
Meanwhile, the S&P BSE Sensex was up 275.54 points or 0.99% at 28,135.14.
On BSE, so far 5.97 lakh shares of Aditya Birla Nuvo changed hands in the counter compared with average daily volume of 1.96 lakh shares in the past two weeks. The stock hit a high of Rs 1,409.15 and a low of Rs 1,180 so far during the day. The stock had hit a record high of Rs 1,664 on 9 August 2016. The stock had hit a 52-week low of Rs 685 on 29 February 2016.
The large-cap company has equity capital of Rs 130.22 crore. Face value per share is Rs 10.
After the completion of the merger of Aditya Birla Nuvo (ABNL) with Grasim, the financial services business of ABNL carried under Aditya Birla Financial Services (ABFSL) will be demerged into a separate company. ABFSL will be separately listed on the bourses in due course. For merger of ABNL with Grasim, each shareholder of ABNL will get 3 equity shares of Grasim for every 10 equity shares held in ABNL. For demerger of financial services business into ABFSL, each shareholder of Grasim (post-merger) will receive 7 equity shares in ABFSL for every 1 equity share held in Grasim. After the completion of the two-stage transaction, Grasim will hold 57% stake and Grasim shareholders will own the remaining stake in ABFSL. The transaction is expected to be completed by Q4 March 2017 or Q1 June 2017.
Kumar Mangalam Birla, Chairman, Aditya Birla Group said that the proposed restructuring will create one of India's largest, well-diversified companies with a healthy mix of businesses with steady cash flows and long-term growth opportunities. With diverse businesses spanning manufacturing and services, the combined company provides a play on India's growth story, Birla said. The demerger and listing of the financial services business will unlock value for shareholders, he added.
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ABNL's consolidated reported net profit declined 56.79% to Rs 305 crore on 0.18% growth in revenue to Rs 3194 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 11 August 2016. ABNL net profit on like-to-like basis declined 13.1% to Rs 305 crore in Q1 June 2016 over Q1 June 2015 due to reduction of ABNL's share in Idea Cellular's net profit by Rs 148 crore.
For the current financial year (FY 2017), ABNL has planned capex of about Rs 325 crore for its divisions, including Rs 191 crore and Rs 40 crore towards the expansion of linen yarn and VFY capacities respectively. Besides, there will be a capital requirement to the tune of about Rs 750 crore in the financial services businesses and equity requirement of about Rs 150 crore for ABNL's 51% share in the new ventures viz. solar power, payments bank and health insurance, ABNL said in a statement.
ABNL is a business conglomerate. It commands leadership position across its financial services, telecom, linen and manufacturing businesses.
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