Birla Global To Place Shares With Promoters, Fis

Birla Global Finance Ltd (BGFL), the holding company for all the Aditya Birla group financial services companies, is to make a preferential allotment of equity share to the promoters.

It is also planning to place shares with select foreign and domestic institutions. BGFL will privately place 60 lakh shares at an indicative price of Rs 100 per share, of which half could being placed with the promoters.

Currently, the Aditya Birla Group holds 56.48 per cent stake in BGFL while the balance 43.52 per cent is being held by the Indian public.

The Aditya Birla group has an asset base of close to $3.8 billion which includes several leading companies like Grasim, Hindalco, Indian Rayon and Indo Gulf.

 

The proceeds of the private placement will be utilised to retire BGFL's high cost debt and to fund its foray into the insurance business.

The issue is being lead managed by ASK Raymond James & Associates Ltd. Currently the stock is in the rolling settlement segment and is quoted between Rs 45-50 per share.

BGFL vice president P Chatterjee confirmed the placement plan and added that "of the 60 lakh shares, nearly 50 per cent (30 lakh shares) will be subscribed to by the Aditya Birla Group. Secondly, we also intend to hive off the hire purchase segment (retail finance business) into a separate 100 per cent subsidiary. Subsequently both domestic and foreign players will be viewed for partnership."

The company has four main areas of operations. The non-banking finance division, asset management (mutual fund) company, mutual fund distribution company and various stockbroking companies.

In a detailed presentation to institutions, BGFL has highlighted that in the coming years it intends to launch an electronic business channel with B2B and B2C objective which will offer convenience, quick access to information and offer almost all services through the net. The company expects to break-even in the first year of operations.

BGFL will also spin off its retail finance business into a separate subsidiary for which it is scouting for a suitable partner.