Grasim's deal with Century: An earnings-accretive proposition

Deal will help drive its viscose filament yarn biz without significant investment by the company

Grasim’s deal with Century Textiles, where it gets the right to manage and operate the latter’s viscose filament yarn (VFY) business for a period of 15 years, is being looked at in a positive light. 

First, Grasim — a holding company for many businesses such as telecom, cement, and financial services — is looking at growing its core viscose staple fibre (VSF) and chemicals business. Growth in the core business will drive stock prices in proportion to its earnings growth, compared to holding businesses’ earnings, which are accorded a discount. Second, the move will significantly increase Grasim’s presence in the