Aditya Birla Capital Ltd (ABCL) revealed its plans on Monday to merge with its subsidiary, Aditya Birla Finance, transitioning from a holding company to an operational non-banking financial entity.

The merger is expected to consolidate the financial strength of the combined entity, enhancing its access to capital directly. According to a statement released by the company, the merged entity is anticipated to witness a significant increase of approximately 150 basis points in its total capital adequacy ratio, based on proforma figures as of December 31, amounting to Rs 1.10 lakh crore in total assets.

Aditya Birla Capital stressed that the merger would not impact the existing shareholding structure or management arrangements. The move aims to streamline operations and leverage synergies, positioning the company for enhanced financial flexibility.

ABCL's shares have demonstrated strong performance, recording an 8.1 per cent increase year-to-date following a 10.8 per cent rise in 2023. The merger announcement reflects the company's strategic efforts to strengthen its position in the financial services sector.

(With Reuters inputs)