Aditya Birla Nuvo: A Premium Conglomerate
Aditya Birla Nuvo Ltd. (ABNL) is a premium conglomerate. It is part of the Aditya Birla Group, a US$ 41 billion Indian multinational operating in 36 countries across six continents.
To be a premium conglomerate building leadership in businesses and creating value for all the stakeholders.
- Investing in promising sectors
- Building leadership in businesses
- A platform to drive synergy of resources
- Delivering best value to all the stakeholders
- To be a responsible corporate citizen
With a market cap of 9,800 Crore as on 4th March 2016, ABNL commands leadership position across its Financial Services, Telecom, , Linen and Manufacturing businesses. Anchored by about 36,600 employees, ABNL touches lives of more than 170 million Indians.
Over the years, Aditya Birla Nuvo has transformed itself from a manufacturing company to a diversified conglomerate.
- Note 1: Revenue and EBIT Mix are excluding IT-ITeS business which was divested w.e.f. 9th May 2014
- Note 2: Madura Fashion (a division of ABNL) and Madura Lifestyle (a branded apparel retailing division of Madura Garments Lifestyle retail Co.Ltd. a subsidiary of ABNL) were de-merged into Pantaloons Fashion & Retail Ltd. a listed subsidiary of ABNL, w.e.f from 1st April 2015.
- Delivered robust earnings growth in 2014-15
- Revenue at 26,516 crore
- Posted highest ever EBITDA at 5,798 crore – Grew by 18% year on year
- Achieved highest ever Net Profit at 1,416 crore - Grew 24% over the previous year.
- ABNL commands leadership position in India across its businesses:
- Aditya Birla Financial Services (ABFS) ranks among top 5 fund managers in India (excl. LIC), with an AUM of 185,515 Crore as on 31st December 2015, lending book of 23,442 Crore (including Housing Finance) and having annual revenue size of 7,926 Crore (2014-15). Having a diversified portfolio of 12 lines of businesses, ABFS is trusted by over 7 million customers & anchored by over 11,750 employees, it has a nationwide presence through 1,350 branches / points of presence & about 120,000 agents / channel partners. It posted Earnings before Tax of 849 Crore in FY15.
- Birla Sun Life Insurance (BSLI) is a 74:26 joint venture between ABNL and Sun Life Financial, Canada. BSLI ranks #5 in India among private players in terms of new business premium with a market share of 6.9% during nine months ended 31st December 2015. It remained the number #1 private life insurer in the Group segment. It is managing AUM of 30,421 Crore as on 31st December, 2015. It reported Embedded Value of 3,260 Crore as on 31st March 2015 and VNB margin at 14.1%.
- Birla Sun Life Asset Management (BSLAMC) is a 51:49 joint venture with Sun Life Financial, Canada. BSLAMC improved its all India ranking to 4th and market share to 10.19% with an AUM of 153,974 Crore as on 31st December 2015. It ranks #4 in equity AUM and among top 2 players in fixed income AUM.
- Aditya Birla Finance Ltd. (ABFL), the NBFC arm, has grown at a 69% CAGR since March 2011 to reach a lending book size of 22,210 Crore as on 31st December 2015. Its net worth has expanded to 3,051 Crore driven by capital infusion and healthy internal accruals. ABFL has built a well diversified quality portfolio with Gross NPA at 0.82%, net NPA at 0.16%, Return on average Assets at 2.09% p.a. and Return on average Equity at 15.1% p.a.
- Aditya Birla Housing Finance, which had commenced operations in October 2014, has attained lending book of 1,232 Crore as on 31st December 2015.
- A prominent player in Private Equity, Wealth Management, Broking & General Insurance Advisory space.
- MyUniverse is India’s #1 online personal finance management platform, enjoying trust of over 2.3 million registered users who manage more than 18,750 Crore of money through MyUniverse. MyUniverse is the 7th largest SIP distributor in India by numbers.
- ABNL is foraying into health insurance business in India through a 51:49 joint venture with MMI Holdings Ltd. (a leading South African insurance-based financial services group).
- ABNL holds 23.26% in Idea Cellular, a 51,700 Crore company by market cap as on 31st December 2015. It posted revenue of 31,527 Crore in FY15. Idea is the 3rd largest cellular operator in India with revenue market share at 18.5% (Q2FY16) and incremental revenue market share at 37.7% (Q2FY16 over Q2FY15).
- Idea ranks among top 6 cellular operators in the world with about 2.16 billion minutes of usage per day.
- Serving a large customer base of over 182 million active subscribers, Idea holds 16% in Indus towers, one of the world’s largest tower companies.
- Aditya Birla Group holds 42.24% in Idea Cellular.
- Idea has the highest 103.2% active subscribers’ ratio in industry and has a leadership position in net subscribers’ gainers post launch of mobile number portability in India.
- On the back of strong quarterly average cash profit generation of about 2,500 Crore, Idea is competitively well positioned to support its growth plans.
- With combined revenue of 5,405 Crore in FY15, ABNL’s divisions posted EBIDTA of 615 Crore.
- Jaya Shree is the largest linen yarn and fabric player in India
- Indo-Gulf is among the best energy efficient urea plants in India
- Indian Rayon is the largest manufacturer and exporter of viscose filament yarn in India
- Aditya Birla Insulators is India’s largest and the world’s fourth largest manufacturer of insulators
New Ventures and developments:
Foray in Solar Power
ABNL has partnered with the Abraaj Group to invest in the solar power business in India. Aditya Birla Renewables Limited, a 51:49 JV with the Abraaj Group, will bid for the solar power projects, with an aim to build a large scale renewable energy platform focused on developing utility-scale solar power plants in India
Foray in Payments Bank
RBI has given an in-principle approval to ABNL for setting up a Payments Bank as promoter. The proposed Payments Bank incorporated as Aditya Birla Idea Payments Bank Ltd. will be 51:49 Joint Venture (JV) between ABNL and Idea Cellular. The JV will apply to RBI for the final grant of license which will be subject to fulfilment of certain regulatory pre-requisites.
Creation of India’s largest branded apparel retail company
In May 2015, ABNL had announced consolidation of its branded apparels businesses under its listed subsidiary Pantaloons Fashion & Retail Ltd. (PFRL), through a Scheme of Arrangement. On scheme becoming effective on 9th January 2016, Madura Fashion & Lifestyle business, the branded apparel division of ABNL, stands transferred to and vested in PFRL, which has been rechristened as Aditya Birla Fashion & Retail Ltd. (ABFRL) w.e.f. 12th January 2016. ABFRL allotted 26 equity shares to the shareholders of ABNL for every 5 equity shares held by them in ABNL as on the record date 21st January 2016. The new shares so allotted by ABFRL were listed and permitted for trading on BSE and NSE with effect from 4th February 2016. With the reduction in the resultant holding of ABNL in ABFRL to 9.1%, ABFRL has ceased to be the subsidiary of ABNL. This has resulted in creation of India’s largest branded apparel retail company and value unlocking for shareholders by providing them an opportunity to participate directly in the fashion space through ABFRL.
Sun Life Financial, Canada to raise its stake in BSLI from 26% to 49%
Pursuant to an agreement with ABNL, Sun Life Financial, the JV partner, will increase its stake in Birla Sun Life Insurance (BSLI) from 26% to 49%, for a sum of 1,664 Crore, valuing BSLI at 7,235 Crore. On closure of the transaction, ABNL will continue to hold controlling stake in BSLI at 51%. The transaction is subject to the requisite statutory and regulatory approvals in India and Canada.
Strong Standalone balance sheet
- Standalone balance sheet has been the growth engine for ABNL & a platform to drive synergy of capital resource
- Invested ~USD 1 billion to fund the growth capital requirements of its businesses over past six years
- Led by realisation of subsidy in Agri business and transfer of 439 Cr. of net debt pursuant to de-merger of Madura into PFRL, Net debt reduced by ~ 600 Cr. during past nine months
- In FY 2015-16, standalone balance sheet will support following investment and capex plan:
- Standalone Capex of 150Cr.
- Investment of 800 Crore in the Financial Services businesses
- Proceeds of 1,664 Cr. from sale of 23% stake in BSLI will strengthen the balance sheet.
To sum up, most of the businesses are contributing to the profitable growth of the Company and are competitively well positioned. Going forward, the thrust is on capturing growth opportunities across the businesses to achieve the next higher level of growth