RBI accords approval for Aditya Birla Finance merging with parent

Aditya Birla Capital Ltd (ABCL), a BSE-listed non-banking financial company (NBFC), has been granted approval of the Reserve Bank of India (RBI) with ‘no objection’ for the scheme of amalgamation of Aditya Birla Finance Ltd, a wholly-owned subsidiary, with itself.

This paves the way for creating a large unified operating non-banking finance company.

Aditya Birla Finance Ltd (ABFL) is an upper-layer NBFC under RBI’s scale-based regulations. These norms require the listing of upper-layer NBFC shares on the stock exchange. The Aditya Birla group has opted to merge ABFL with its listed parent, ABCL.

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The company and the amalgamating company have received letters (dated September 18, 2024) from the RBI, whereby the RBI has accorded its ‘no objection’ for the scheme, ABCL informed stock exchanges.

Further, the company will approach the National Company Law Tribunal (NCLT) to complete the amalgamation process. In March 2024, the company indicated that the amalgamation process would be completed in about a year.

The merger will increase total capital adequacy by approximately 150 basis points (bps) and reduce leverage to 4.15 percent for the amalgamated entity on a proforma basis, it had said.

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