INDIA BUSINESS WORLD - FEBRUARY 1^st - FEBRUARY 15^th - 2008

ADITYA BIRLA TO RAISE STAKE TO 40% IN GROUP COS

Aditya Birla Group, the $24-billion diversified conglomerate, intends to scale up its shareholding in its cement flagship Grasim Industries to at least 40%, according to group chairman Kumar Mangalam Birla. Mr Birla said the aim is to hold a majority stake (at least 40%) in all the major group companies. The group has already initiated steps to scale up holding in Aditya Birla Nuvo and Hindalco Industries through preferential issue of equity and warrants.

However, it has not yet decided on whether it will follow the same instrument for Grasim, where it holds nearly 26% stake. To pre-empt a hostile raider, all the old business houses are scaling up their holdings in group companies. In 2006, the Tatas had raised their stake in Tata Steel. Last year, Reliance Industries (RIL) chairman Mukesh Ambani announced infusion of Rs 16,000 crore to scale up his holding in RIL by 4% to 55%.