Companies

Merger has nothing to do with fuelling the telecom business: Kumar Mangalam Birla

SURESH P IYENGAR THOMAS K THOMAS Mumbai | Updated on January 17, 2018 Published on August 11, 2016

Playing the growth story... Kumar Mangalam Birla

Idea Cellular has its own plans, says chairman

Aditya Birla Group Chairman Kumar Mangalam Birla said the restructuring of businesses announced on Thursday was aimed at riding the India growth story, which is seeing green shoots, thanks to positive changes in policy by the Centre.

Responding to a question from BusinessLine, Birla said that policy decisions such as the GST are huge positives. “I do not see any headwinds in particular. The government is doing the right things,” he said.

“Essentially, the restructuring is a play on the India growth story. The government has done a great job in getting an important (piece of) legislation like GST passed. It will have a multiplier effect on the economy. More important, the government is committed to bringing in change,” he added.

Birla said that the new structure will position the group to leverage the synergies of Grasim and Aditya Birla Nuvo as both have a presence in similar spaces.

Asked which sectors will grow the fastest, Birla said that cement, chemicals and viscose staple fibre and financial services would be the key drivers.

Commenting on speculation that the merger was being done to fuel Idea Cellular’s growth, Birla said that the deal had nothing to do with the telecom business.

The Aditya Birla Nuvo stock was beaten on the bourses on Thursday on rumours that the merger was being done to finance Idea Cellular growth. “ Idea Cellular has its own plans. This merger has nothing to do with fuelling the telecom business,” Birla said.

As a word of caution to minority shareholders, Birla said they should not react to market speculation. Such complex deals need time to understand. “The new entity has very interesting businesses that keep generating cash,” he said.

Published on August 11, 2016
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