Aditya Birla Group expands financial services footprint with broking business

28th August, 2008

Enters into an agreement with Apollo Sindhoori Capital Investments Ltd (ASCIL) to acquire 56 per cent stake at Rs. 198.80 crore

Aditya Birla Nuvo Ltd, a diversified conglomerate, part of the Aditya Birla Group, today entered into an agreement with ASCIL to acquire 56 per cent stake in the retail broking company for Rs. 198.8 crore. The agreement is another step towards growing the Aditya Birla Group's financial services footprint. This move will strategically further strengthen the position of the financial services group as a manufacturer and distributor of value added financial products.

Aditya Birla Nuvo Ltd will make an open offer, post receiving the necessary approvals. Says, Mr. Ajay Srinivasan, chief executive, Financial Services, Aditya Birla Group, "The strategic intent of this agreement is to position Aditya Birla Financial Services Group as a broad based and integrated player in the financial services business. We already have a strong presence across financial services verticals that include life insurance, fund management, distribution and wealth management, security based lending, insurance broking and private equity. Apollo Sindhoori Capital Investments offers us a well established platform with a capable team that will integrate well into our existing business and further strengthen our presence in the financial services space."

Ms. Suneeta Reddy, Director, Apollo Sindhoori (ASCIL) said, "It gives us immense pleasure to be associated with one of India's leading business houses and their growing financial services group. It is a win-win situation for our employees and customers who will now have access to a wide array of products and services from one of India's household brand names.  We have chosen to retain a 10 per cent stake, as we believe the Aditya Birla Group will add substantial value to the company."

The primary benefits ASCIL adds to Aditya Birla Financial Services Group:

  • ASCIL is a leading player with over 10 years of experience in the broking business thereby providing the Aditya Birla Group an established and tested platform to enter the retail broking space.
  • ASCIL has a strong distribution network of over 190 own and 570 franchisee branches, which will increase the reach and accessibility for the Group's financial services products.
  • A large 150,000 customer base provides the opportunity for cross selling.
  • ASCIL has a scalable business model based on a strong technology backbone and a wide product mix:
    • Trading facility in equity segment and derivative segment on NSE & BSE
    • Trading facility in commodity segment, including bullion, oils, gaur seed etc. through a subsidiary
    • Depository participant [DP] services of NSDL and CDSL at major locations
    • Online bidding for IPO
    • Distribution of mutual funds

About Aditya Birla Financial Services Group
Aditya Birla Group has a strong presence across various financial services verticals that include life insurance, fund management, distribution and wealth management, security based lending, insurance broking and private equity.  The consolidated revenues from these businesses crossed the US 1 billion dollar mark in 2007-08. In the first quarter of 2008-09, the financial services business continued its strong momentum of growth with consolidated revenues crossing Rs. 982.8 crore for the first quarter, up from Rs. 535.9 crore in the first quarter of last year. The life insurance and fund management companies are both top five in their sectors.

About Aditya Birla Nuvo
Aditya Birla Nuvo Ltd is a diversified conglomerate and the platform that has launched many new businesses for India's premier business house, the Aditya Birla Group. Aditya Birla Nuvo has a dozen businesses under its fold, ranging from textiles to telecom.

The focus on each business has made it a leading player in most segments, including viscose filament yarn, carbon black, branded garments, agri business, textiles and insulators. Over the past few years, Aditya Birla Nuvo, through its subsidiaries and joint ventures, has made successful forays into life insurance, telecom, business process outsourcing (BPO), IT services, fund management and other financial services.