Money & Banking

Aditya Birla Nuvo to invest Rs 1,664 cr in NBFC, housing finance, payment bank biz

Rajalakshmi S | | Updated on: Dec 08, 2015

Aditya Birla Nuvo Ltd intends to deploy the Rs 1,664 crore it will receive from the sale of 23 per cent stake in Birla Sun Life Insurance to joint venture partner Sun Life Financial in the non-banking finance and housing finance businesses, health insurance, payment bank and solar power sectors.

Aditya Birla Nuvo Ltd (ABNL), had, on December 2, 2015, announced that Sun Life Financial will increase its stake in the life insurance joint venture, Birla Sun Life Insurance (BSLI), from 26 per cent to 49 per cent at an investment of Rs 1,664 crore, subject to the requisite approvals. ABNL will continue to hold the controlling stake in BSLI at 51 per cent.

“At ABNL, our endeavour is to create long-term value for all the stakeholders by investing in the promising sectors.

“At the same time, the thrust has always been to keep the standalone balance sheet strong, which has been the growth engine for ABNL,” the diversified conglomerate, which is into businesses such as telecom, financial services, fashion & lifestyle, fertilisers and textiles, said in an unpdate.

NBFC and housing finance businesses are growing at a good pace and require capital support. ABNL has capital commitment to the tune of Rs. 600 crore for 2015-16 towards these two businesses.

Besides, ABNL has identified promising investment opportunities in the health insurance, payment bank and solar power sectors which will need funding support equivalent to ABNL’s 51 per cent stake, balance being funded by the respective joint venture partners.

“Proceeds from the stake sale in BSLI will reduce the net debt of ABNL substantially. Coupled with the free cash flow generation from divisions, the standalone balance sheet of ABNL will stand strengthened to support its growth plans,” according to the update.

ABNL elaborated that the payments bank joint venture between ABNL and Idea Cellular will capitalise on Idea’s nationwide presence through two million plus retail distribution channels across 375,000 towns and villages to reach out to millions of potential customers. This provides a ready-made platform for our financial services businesses to reach out to mass India cost-effectively.

Published on January 22, 2018

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