Aditya Birla Capital Invests ₹300 Crore in Housing Finance Subsidiary ABHFL

On August 27, 2024, Aditya Birla Capital Limited (ABCL) announced that it had invested ₹300 crore in Aditya Birla Housing Finance Limited (ABHFL) through a rights issue.

Despite this investment, ABCL’s percentage shareholding remains unchanged, and ABHFL remains a wholly-owned subsidiary of ABCL. Since ABHFL is a WOS, it qualifies as a related party to ABCL. In this case, ABCL acts as the holding company and promoter of ABHFL. The transaction between ABCL and ABHFL is conducted at arm’s length. No governmental or regulatory approvals are required for this acquisition. The equity shares of ABHFL were allotted on August 27, 2024, marking the completion of this transaction.

Objectives and Impact of the Investment

ABCL’s primary purpose in investing in ABHFL is to support the latter’s growth and funding needs. This move will also help improve ABHFL’s leverage ratio.

Acquisition Details

• Form of Consideration: The investment was made in cash.
• Cost of Acquisition: Aditya Birla Capital Limited (ABCL) subscribed to the equity shares of Aditya Birla Housing Finance Limited (ABHFL) on a rights basis for a total cash consideration of ₹300 crore.
• Shareholding Percentage Acquired: Following this investment, ABCL’s shareholding in ABHFL remains unchanged at 100%, as ABHFL continues to be a wholly owned subsidiary of ABCL.

About Aditya Birla Housing Finance Limited

ABHFL is already a wholly owned subsidiary (WOS) of Aditya Birla Capital Limited (ABCL). ABHFL operates within the housing finance industry. The investment was made on a rights basis, supporting ABHFL’s ongoing operations and growth. While specific turnover details for the past three years are not provided, ABHFL has been a significant player in its industry, focusing on housing finance solutions in India.

About Aditya Birla Capital Limited

Aditya Birla Capital, a part of Grasim Industries Limited, provides a variety of financial products and services in India and abroad. Their offerings include life, health, motor, and travel insurance, wellness programs, and corporate insurance solutions. They also offer investment options like mutual funds, stocks, portfolio management, pension funds, and real estate investments. In addition, Aditya Birla Capital provides various financing solutions, including personal and home loans, SME and mortgage financing, and loans against securities.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.