Aditya Birla Capital Ltd. has received a 'no objection' letter from the Reserve Bank of India for the proposed merger of Aditya Birla Finance Ltd. with itself, the former said in a press release on Wednesday.
The merger is significant as it will make the merged entity a large unified operating non-banking finance company.
Aditya Birla Finance is the wholly owned subsidiary of Aditya Birla Capital.
Aditya Birla Finance offers end-to-end lending, financing, and wealth management solutions. It is registered with the RBI as an upper-layer non-deposit-accepting non-banking finance company.
It is also the first among upper-layer NBFCs to set a clear path for compliance with the RBI's scale-based regulations. According to the rules laid down by the regulator, upper-layer NBFCs are expected to list within three years of the list being created.
The merger will allow for better access to capital, operational synergy and enhanced value creation for shareholders.
Aditya Birla Finance is also among the top five largest private diversified NBFCs in India based on assets under management. For the quarter ended June, Aditya Birla Finance had a total AUM of Rs 1,07,306 crore.
The merger remains subject to other statutory and regulatory approvals from the National Company Law Tribunal, other applicable authorities, and the respective shareholders and creditors of the companies.
On July 2, Aditya Birla Finance received a 'no adverse observations' letter from BSE Limited and 'no objection' letter from the National Stock Exchange of India Limited.
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