Grasim, Aditya Birla Nuvo edge lower on reports of merger proposal

Grasim Industries and Aditya Birla Nuvo edged lower by 4.62% to 5.59% at 11:17 IST on BSE on reports that Aditya Birla Group is contemplating a merger of Grasim Industries and parts of Aditya Birla Nuvo.

Grasim Industries (down 5.59% at Rs 4,877.80) and Aditya Birla Nuvo (down 4.62% at Rs 1,504) edged higher.

Meanwhile, the S&P BSE Sensex was down 190.22 points or 0.68% at 27,894.94.

According to reports, as part of another round of corporate reorganisation, Aditya Birla Group is contemplating a two-step restructuring which involves the merger of Grasim Industries and parts of Aditya Birla Nuvo (ABNL), which is likely to be followed by the hiving-off of the financial services business of ABNL viz. Aditya Birla Financial Services (ABFS) into a separate company. ABFS is currently a 100% subsidiary of ABNL. The merger and the complete reorganisation could involve a number of steps. A direct merger of ABNL and Grasim Industries and the simultaneous spinning-off of financial services business into a separate company is among the options, reports suggested. A final announcement could be expected as early as this week, reports added.

Grasim Industries' two main businesses are viscose staple fibre (VSF) and cement. The company is set to announce Q1 June 2016 results tomorrow, 11 August 2016. On consolidated basis, the company's net profit rose 37.4% to Rs 696.09 crore on 13.7% rise in net sales to Rs 9896.43 crore in Q4 March 2016 over Q4 March 2015.

ABNL is a business conglomerate. It commands leadership position across its financial services, telecom, linen and manufacturing businesses. The company is set to announce Q1 June 2016 results tomorrow, 11 August 2016. On a consolidated basis, the company's net profit fell 1.5% to Rs 326.69 crore on 9.2% decline in net sales to Rs 6318.41 crore in Q4 March 2016 over Q4 March 2015.

Powered by Capital Market - Live News