Aditya Birla Nuvo gains after selling BPO unit Minacs

Aditya Birla Nuvo rose 1.87% to Rs 1,085 at 10:18 IST on BSE after the company agreed to sell its business and technology outsourcing firm Aditya Birla Minacs Worldwide at an enterprise value of $260 million.

The company made the announcement after trading hours on Thursday, 30 January 2014.

Meanwhile, the BSE Sensex was up 66.11 points, or 0.32%, to 20,564.36.

On BSE, so far 1,138 shares were traded in the counter, compared with an average volume of 10,810 shares in the past one quarter.

The stock hit a high of Rs 1,088.85 and a low of Rs 1,072.40 so far during the day. The stock hit a 52-week high of Rs 1290.10 on 4 October 2013. The stock hit a 52-week low of Rs 930 on 8 April 2013.

The stock had underperformed the market over the past one month till 30 January 2014, sliding 13.10% compared with the Sensex's 3.05% fall. The scrip had underperformed the market in past one quarter, falling 12.12% as against Sensex's 2.55% fall.

The large-cap company has an equity capital of Rs 130.08 crore. Face value per share is Rs 10.

Aditya Birla Nuvo said its wholly-owned subsidiary, ABNL IT & ITES, has entered into an agreement to divest its IT-ITeS subsidiary, Aditya Bins Minacs Worldwide, subject to customary closing conditions, third party consents and regulatory approvals. Pursuant to a share purchase agreement with a group of financial investors led by Capital Square Partners (CUP) and CX Partners (CXP), ABNL IT & ITeS will divest Aditya Birla Minacs at an enterprise value of $260 million subject to the working capital adjustments,

Aditya Birla Nuvo entered the ITeS sector in 2003 through acquisition of TransWorks, a $12 million company. Later to provide scale to the business, TransWorks acquired Minacs, a $265 million company in 2006. Committed to its turnaround and growth, ABNL supported Minacs over the years, to attain revenue of $450 million (Rs 2466 crore) and net profit of $23 million (Rs 125 crore) in fiscal 2012-13, Aditya Birla Nuvo said in a statement.

Today, Aditya Birla Minacs has risen to the stature of a global business solutions provider that partners with global corporations through its 35 centers spanning 10 countries across 3 continents. To further expand its scale, enhance its competitive advantage and attain the next level of growth, Minacs requires capital investments, the company added.

Being a conglomerate, Aditya Birla Nuvo constantly evaluates its capital allocation strategy and reviews its business portfolio. Given the multiple growth opportunities and ensuing capital requirements at ABNL, the company decided to divest Minacs to a strategic financial investor, with extensive domain experience, who can ensure that Minacs continues to progress forward on its strategic roadmap, Aditya Birla Nuvo said.

The transaction is expected to be completed in 2 to 3 months, subject to the requisite customary and regulatory approvals, the company said.

Dr. Rakesh Jain, Managing Director, Aditya Birla Nuvo, said, "Considering ABNL's capital commitment and growth plans for other businesses, the company has decided to divest Minacs. We are confident that the new shareholders will provide the requisite direction to Minacs and enable it to rise to its full potential."

Mr. Sushil Agarwal, Whole Time Director and CFO, Aditya Birla Nuvo, emphasized that, "The cash flow from the divestment of Minacs will support the growth plans of Aditya Birla Nuvo and ensure its greater focus in the other businesses.

Mr Sanjay Chakrabarty and Mr. Aparup Sengupta, partners of CSP, an investment holding company investing partners' principal capital in private companies, jointly said "We are both very excited to embark on this new beginning with Minacs. This is a great company with exciting potential and a promising future."

Mr, Ajay Reian, Managing partner of CX Advisors, advisors to CXP, a leading india focused $500+ rnillion private equity fund, said "We are indeed excited to be a part of this new journey of Minacs in the coming years.

On a consolidated basis, Aditya Birla Nuvo's net profit rose 2.3% to Rs 290.15 crore on 1.1% increase in net sales to Rs 6424.36 crore in Q2 September 2013 over Q2 September 2012. The company unveils Q3 results on 11 February 2014.

Aditya Birla Nuvo is a $4.75 billion conglomerate. Over the years, it has successfully ventured into the service sectors viz. financial services (life insurance. asset management, NBFC, private equity, broking, wealth management and general insurance advisory). Fashion & lifestyle, telecom, and IT-ITeS. Its razor sharp locus on manufacturing businesses has made it a leading player in the agri, rayon and insulators sectors.

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