Aditya Birla Nuvo (ABNL) intends to deploy the money it will receive, from the sale of 23 per cent stake in Birla Sun Life Insurance (BSLI) to joint venture partner Sun Life Financial, in five segments — non-banking finance, housing finance, health insurance, payments bank and solar power.
Aditya Birla Nuvo , had, on December 2, announced that Sun Life Financial will increase its stake in the life insurance joint venture, Birla Sun Life Insurance, to 49 per cent from 26 per cent at an investment of ₹1,664 crore, subject to 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 stakeholders by investing in 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 it said in an update.
The NBFC and housing finance businesses are growing at a strong pace and require capital support. ABNL has capital commitments to the tune of ₹600 crore for 2015-16 towards these two businesses.
Besides, the investment opportunities identified by ABNL in the health insurance, payments bank and solar power sectors, will be funded by it to the extent of 51 per cent, with the balance being funded by the respective joint venture partners. “Proceeds from the stake sale in BSLI will substantially reduce the net debt of ABNL. Coupled with the free cash flow generation from divisions, the standalone balance sheet of ABNL will stand strengthened to support its growth plans,” said the update.