Aditya Birla Capital Ltd made a weak debut on stock exchanges on Friday with its shares falling 5% from the price at which it was created after billionaire Kumar Mangalam Birla-led diversified conglomerate demerged its financial services business.
Shares of Aditya Birla Capital listed on the BSE at Rs 237.50 apiece, hitting its lower circuit, compared with the post-demerger price of Rs 250.
The stock listed on the exchange’s trade-to-trade (T2T) category, where intraday trading is not permitted and where same-day delivery of shares traded is mandatory.
The listing comes after the diversified group restructured its businesses last year. As per the restructuring, the group brought more businesses under Grasim Industries Ltd by merging Aditya Birla Nuvo Ltd with the flagship company while hiving off the financial services business as a separate firm.
Grasim is already a diversified firm with huge exposure to chemicals and textiles businesses. It is also the parent of UltraTech Cement Ltd, the country’s single-largest cement producer. After the restructuring, it will house a portfolio of manufacturing and services businesses with a leading presence in cement, financial services, telecom, textiles and chemicals sectors.
Meanwhile, Aditya Birla Capital now has a market capitalisation of Rs 52,273 crore ($8.16 billion) after its listing.
In June, the company was valued at roughly Rs 32,000 crore when PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji, agreed to buy a 2.2% stake in the group's financial services arm for Rs 703.7 crore.
Aditya Birla Capital was earlier known as Aditya Birla Financial Services Ltd. The company had earlier entered into an agreement with sister companies Grasim and Aditya Birla Nuvo. This involved Grasim merging Aditya Birla Nuvo with itself and transferring its financial services business to Aditya Birla Capital.
Aditya Birla Capital holds the group’s life and health insurance, asset management, private equity, corporate lending, structured finance, broking, wealth management and housing finance businesses.
The company had assets under management of Rs 2.46 trillion as of 31 March 2017 and a lending book of Rs 38,800 crore. It posted a net profit of Rs 619 crore on total revenue of Rs 5,886 crore for the year through March 2017.