Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Rayon: Now, Aditya Birla Nuvo! - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Sep 12, 2005

    Indian Rayon: Now, Aditya Birla Nuvo!

    The Aditya Birla Group, a Rs 330-bn conglomerate, involved in businesses ranging from metals, fertilisers, textiles, IT-ITES, finance and life insurance, is merging two of its group companies, Birla Global Finance (BGF) and Indo Gulf Fertilisers (IGF) with Indian Rayon. The consolidated entity will be rechristened Aditya Birla Nuvo and will have Rs 60 bn in consolidated revenues.

    The swap ratio for the deal is at 1:3 under two separate restructuring schemes. This implies that shareholders in BGF and IGF will receive one share of Indian Rayon for every three shares they hold in either of the two companies.

    Shareholding patterns of individual companies and the consolidated entity
    Gulf Fertilisers
    Global Finance
    Birla Nuvo
    Promoters 25.2% 58.2% 74.4% 38.0%
    Indian Public* 22.0% 14.9% 16.0% 0.0%
    FIIs 12.3% 2.4% 0.0% 15.0%
    Banks/FIs, Govt/Non-govt instns 16.1% 9.1% 0.0% 22.0%
    Others 24.4% 15.4% 9.7% 25.0%
    * For Aditya Birla Nuvo, the shareholding of the Indian public is included in 'Others'

    What is the rationale?
    As per the management, this merger will enable the consolidated entity to have greater borrowing power. This assumes significance in light of the fact that the entity will be a highly diversified company, involved in businesses ranging from viscose staple fibre (VSF), textiles, carbon black, insulators, IT-ITES, telecom and life insurance. The cash flows from 'value businesses' like VSF and textiles will be used to fund the 'high-growth businesses' like IT-ITES and life insurance. The group also plans to explore opportunities in financial services, asset management and banking in future, provided regulations permit. Clearly, the Aditya Birla Group has ambitious expansion plans and this step signifies this.

    We shall soon update our readers with a detailed review of this restructuring exercise of the Aditya Birla Group.



    Equitymaster requests your view! Post a comment on "Indian Rayon: Now, Aditya Birla Nuvo!". Click here!

    1 Responses to "Indian Rayon: Now, Aditya Birla Nuvo!"

    amit mittal

    Aug 3, 2017

    hi kindly confirm that i have 123 shares of indian rayon industries. so how many shares of AB Novo i will get insted of these shares.and how

    Amit mittal

    Equitymaster requests your view! Post a comment on "Indian Rayon: Now, Aditya Birla Nuvo!". Click here!

    More Views on News

    Sorry! There are no related views on news for this company/sector.

    Most Popular

    This Small Cap Can Drive Chinese Players Out of India (and Make a Fortune in the Process)(The 5 Minute Wrapup)

    Aug 17, 2017

    A small-cap Indian company with high-return potential and blue-chip-like stability is set to supplant the Chinese players in this niche segment.

    Dear PM Modi, India is Already Land of Self-Employed, and It Ain't Working(Vivek Kaul's Diary)

    Aug 21, 2017

    Most Indians who cannot find jobs, look at becoming self-employed.

    It's the Best Time to Buy IT Stocks(Daily Profit Hunter)

    Aug 16, 2017

    The IT Sector could be in an uptrend till February 2019. Are you prepared to ride the trend?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Think Twice Before You Keep Money In A Savings Bank Account(Outside View)

    Aug 22, 2017

    Post demonetisation, a cut in bank savings deposits rates was in the offing.

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Jul 4, 2017 (Close)


    • Track your investment in ADITYA BIRLA NUVO with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks



    Detailed Quarterly Results With Charts