Aditya Birla Nuvo looking to sell stake: report

Aditya Birla Nuvo is in talks with global private equity players Blackstone, Carlyle and KKR to sell part of the shareholding in its proposed holding firm for its financial services business, according to an unconfirmed report.

"The company needs equity infusion to sustain the growth momentum for the insurance, asset management and other financial services businesses," Business Standard quoted an unnamed 'leading PE player' as saying. "The talks have been initiated but it will take at least three to four months before anything concrete comes up."

An A V Birla spokesperson refused to comment on what he called "market speculation."

The financial services holding company will house Birla's asset management, insurance, stock broking, wealth management and private equity businesses. Nuvo, in a joint venture with Canada's Sun Life, holds 74 per cent in its life insurance and 50 per cent in its asset management company under Birla Sun Life.

It recently acquired Apollo Sindhoori from the Chennai-based Reddy family to scale up its stock broking business. It also increased its stake in the distribution and wealth management company Birla Sun Life Distribution by buying Sun Life's 50 per cent stake.

The company requires equity to expand because its debt is already high. At the end of the last financial year, it had Rs4,300 crore of debt against a net worth of Rs3,744 core. The company also had a treasury surplus of Rs800 crore, which gives it a net gearing of 0.93. This gives Aditya Birla Nuvo little room to raise fresh debt.