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Aditya Birla Group to up stake in four companies

The founders of Aditya Birla Group plan to hike their shareholding in the group's four largest companies to around 40 per cent in the next three years, a leading business daily said on Monday.

The paper quoted group chairman Kumarmangalam Birla as saying that low share prices and challenges of a new liberalised environment were the factors behind the move.

A group spokeswoman reached by Reuters confirmed the plans.

The four companies are: Grasim Industries Ltd, India's third-largest cement maker; Hindalco Industries Ltd, the country's largest aluminium producer; copper and fertiliser producer Indo-Gulf Industries Ltd; and yarn and garment maker Indian Rayon & Industries Ltd.

"We intend to raise the equity levels to 40 per cent in another three years. I believe that the shares of the four companies are undervalued at current prices," Birla told the paper.

The Birlas now own 30 per cent of Indo-Gulf, 23 percent of Hindalco, 21 per cent of Grasim and 27 per cent in Indian Rayon, the paper added.

The Aditya Birla Group is one of India's leading conglomerates with business interests ranging from textiles to aluminium.

The paper said the stake hike will be done through open market purchases.

Indian takeover regulations allow founders to buy up to 5 per cent every year from the market without making an open offer.

In the last financial year, the group hiked its stake in Grasim by three percent and in Indian Rayon by 1.3 per cent.

Several Indian family groups have been rattled by hostile bids from corporate raiders who have been lured by the low share prices and the large asset base of old economy companies.

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