Aditya Birla Group expands financial services footprint

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Mumbai, Aug 28 (ANI/Business Wire India): Aditya Birla Nuvo Ltd, a diversified conglomerate, part of the Aditya Birla Group, today entered into an agreement with ASCIL to acquire 56 per cent stake in the retail broking company for Rs. 198.8 crores.

The agreement is another step towards growing the Aditya Birla Group's financial services footprint. This move will strategically further strengthen the position of the financial services group as a manufacturer and distributor of value added financial products.

Aditya Birla Nuvo Ltd will make an open offer, post receiving the necessary approvals.

Ajay Srinivasan, Chief Executive, Financial Services, Aditya Birla Group said, "The strategic intent of this agreement is to position Aditya Birla Financial Services Group as a broad based and integrated player in the financial services business. We already have a strong presence across financial services verticals that include life insurance, fund management, distribution and wealth management, security based lending, insurance broking and private equity."

"Apollo Sindhoori Capital Investments offers us a well established platform with a capable team that will integrate well into our existing business and further strengthen our presence in the financial services space," he added

Suneeta Reddy, Director, Apollo Sindhoori (ASCIL) said "It gives us immense pleasure to be associated with one of India's leading business houses and their growing financial services group. It is a win-win situation for our employees and customers who will now have access to a wide array of products and services from one of India's household brand names. We have chosen to retain a 10 per cent stake, as we believe the Aditya Birla Group will add substantial value to the company."

The primary benefits ASCIL adds to Aditya Birla Financial Services Group:

ASCIL is a leading player with over 10 years of experience in the broking business thereby providing the Aditya Birla Group an established and tested platform to enter the retail broking space.

ASCIL has a strong distribution network of over 190 own and 570 franchisee branches, which will increase the reach and accessibility for the Group's financial services products.

A large 150,000 customer base provides the opportunity for cross selling.

ASCIL has a scalable business model based on a strong technology backbone and a wide product mix:

Trading facility in Equity segment and Derivative segment on NSE and BSE.

Trading facility in commodity segment, including bullion, oils, gaur seed etc. through a subsidiary.

epository Participant [DP] services of NSDL and CDSL at major locations.

Online bidding for IPO.

Distribution of Mutual Funds.

Aditya Birla Group has a strong presence across various financial services verticals that include life insurance, fund management, distribution and wealth management, security based lending, insurance broking and private equity. The consolidated revenues from these businesses crossed the US 1 billion dollar mark, in 2007-08.

In the first quarter of 2008-09, the financial services business continued its strong momentum of growth with consolidated revenues crossing Rs. 982.8 crore for the first quarter, up from Rs 535.9 crore in the first quarter of last year. The Life Insurance and Fund management companies are both top 5 in their sectors.

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