RBI approves Aditya Birla Capital's merger with AB Finance; stock up 6%

After receiving approval from the Reserve Bank of India for the merger of Aditya Birla Finance with itself, Aditya Birla Capital awaits approval from the NCLT

Aditya Birla Capital shares soared 5.7 per cent and logged an intraday high of Rs 240 per share. The buying interest in the stock came after the Reserve Bank of India (RBI) gave its nod for the merger of Aditya Birla Capital with its subsidiary Aditya Birla Finance.

At around 9:52 AM, shares of Aditya Birla Capital were up 2.44 per cent at Rs 232.6 per share. In comparison, the BSE Sensex traded 714.29 points higher at 83,662.52 around the same time.

"The company (Aditya Birla Capital) and Amalgamating Company (Aditya Birla Finance) have received letters dated 18 September 2024 from the Reserve Bank of India (RBI) whereby the RBI has accorded it ‘no objection’ for the Scheme," the company's exchange filing stated.

Next, the merger will need approval from the National Company Law Tribunal (NCLT).

"The scheme remains subject to various statutory and regulatory approvals inter alia including approvals from the National Company Law Tribunal, other applicable authorities, and the respective shareholders and creditors of the companies involved in the Scheme, as may be required," the exchange filing added.

Aditya Birla Capital's board had approved the merger of Aditya Birla Capital and Aditya Birla Finance on March 11 this year.

According to the company's exchange filing, "post the scheme becoming effective, Aditya Birla Finance shall be dissolved. Accordingly, the change in the shareholding pattern of Aditya Birla Finance shall not be applicable. There will not be any change in the equity shareholding pattern of Aditya Birla Capital."

Following the merger, Aditya Birla Capital will be engaged in lending business and various non-lending financial services and ancillary businesses, directly and indirectly, through subsidiaries/ associates, the company added.

Aditya Birla Finance and Aditya Birla Capital are a part of the Aditya Birla group. Aditya Birla Finance is a wholly-owned subsidiary of Aditya Birla Capital and is engaged in the business of lending and distribution of financial products.

The merger of both the companies has been floated to simplify the group companies' structure.   .

In the past one year, Aditya Birla Capital shares have gained 24.2, compared to the BSE Sensex's rise of 22.7 per cent during the same period.