Aditya Birla Chemicals merged with Grasim Industries

Grasim Industries (Grasim) informed the stock exchange that Aditya Birla Chemicals (ABCIL) has merged with their company from the appointed date i. e. 1^st April 2015. Grasim will issue 14.62 lakh equity shares of the eligible shareholders of ABCIL in the ratio of 1 equity share valued at Rs 10 each of Grasim for every 16 shares valued at Rs 10 each of ABCIL. The share capital will increase from Rs 91.88 crores to Rs 93.44 crores.Grasim is the largest Chlor-alkali manufacturer in India. It is the leading producer of caustic soda in India with an installed capacity of 4.52 lakh tons per annum (TPA). The merger has consolidated its leadership. Its installed capacity of caustic soda increased from 4.52 lakh TPA to 8.04 lakh TPA.

ABCIL is one of the leading Chlor-Alkali companies in India with an installed capacity of 2.93 lakh TPA of caustic soda. The company has expanded its capacity through organic and inorganic routes in the recent past. The merger will allow ABCIL shareholders to benefit from Grasim's strong balance sheet to fund growth plans at an optimal cost and gain from the significant experience of Grasim in managing sizeable operations. This makes it a win-win situation for both sides.

This merger has resulted in the geographical diversification of the Chlor-Alkali business of the company. It also enables the business to capitalize growth opportunities backed by Grasim's inherent strengths. It thus enhances overall shareholder value. The consolidation is in line with Aditya Birla Group's philosophy to unify similar businesses in one company.

Keeping this in view on the 24th of November, Foreign fund house Morgan Stanley Asia (Singapore) Pte. increased its stake in ABCIL in an  open market transaction. The stake of the fund in ABCIL is now 5.10 percent from the previous 2.49 percent.

On the financial front, the total operating revenue of ABCIL for FY15 is at Rs.1126 crores which is an increase of 5.58 per cent from Rs 1066 crores in FY14. The EBITDA increased by 0.20 per cent to Rs 246 crores in FY15. The Net profit of the company stood at Rs 37.29 crores, a decrease of 25 percent from the previous year owing to an increase in employee expenses and finance costs.

The total operating revenue of Grasim for FY15 is at Rs 32847 crores an increase of 12 per cent from Rs 29323 crores in FY14. The EBITDA increased by 4.67 per cent to Rs 5144 crores in FY15 from Rs 4915 crores. The EBITDA margin of the company stood at 15.66 per cent in FY15 as compared to 16.76 per cent in FY14. The Net profit of the company stood at Rs 2427 crores, a decrease of 14.87 percent from the previous year. The reason for a decrease in the profit of the company is a significant increase in employee expenses and finance costs.

The stock of ABCIL is trading at Rs 236 which is an increase of 1.85 per cent from the previous close and the stock of Grasim is trading at Rs 3667.9, an increase of 0.27 per cent from its previous close.