RBI Approves Aditya Birla Capital's Merger with ABFL

19 Sep 2024 , 02:06 PM

Aditya Birla Capital Limited (ABCL) announced on 18 September 2024 that it received a ‘no objection’ letter from the Reserve Bank of India (RBI) for the proposed merger of its subsidiary, Aditya Birla Finance Limited (ABFL), with the parent company.

The merger will transform ABCL from a holding company into a Non-Banking Financial Company (NBFC), with assets under management (AUM) exceeding ₹5 lakh crore, making it one of the largest NBFCs in India.

The merger, initially approved by ABCL’s board in March 2024, is part of a strategic move to streamline operations and meet RBI regulations, which mandate ABFL’s listing by September 2025.

Earlier approvals were received from BSE, NSE, and now RBI, marking a key step, though further clearance from the National Company Law Tribunal (NCLT), shareholders, creditors, and other regulatory bodies is still pending.

ABCL’s consolidation aims to improve operational efficiency, simplify processes, and enhance capital allocation across subsidiaries, benefiting shareholders.

The merger is expected to strengthen ABCL’s balance sheet and position it as a competitive player in the Indian financial services sector. The RBI’s approval is a positive milestone, and the company is optimistic about finalising the merger upon securing all necessary approvals.