Yash Birla Firms Climb On Restructuring Plan

Yash BirlaBirla Kennametal, Zenith Birla and Birla Power Solution were up 5% to 8% on reports that the Yash Birla Group has determined to reorganize group firms as part of a plan to modernize operations.

Birla Kennametal gained 4.99% to Rs 401.90, Zenith Birla up 8.26% to Rs 39.30, Birla power Solution gained 6.23% to Rs 34.10 and Dagger-Forst climbed 4.95% to Rs 51.90.

The reformation practice among six listed and 14 unlisted entities will see five mergers, formation of six holding companies followed by new acquisitions. The plans would involve fresh investments of more than Rs 1,000 crore, sale of non-crore businesses and lastly, an overseas listing of the restructured body.

According to the plan, the group’s four companies working in the auto component section Birla Kennametal, Dagger Forst, ITM and Birla Peruccini will be combined to produce a large-sized company in the auto component section that will scout companies for possible buyout.

In the textile section, the two companies Birla Transasia Carpets and Birla Cotsyn will be combined to generate a full-fledged textile company. But, before the combination, the group will take Birla Cotsyn to the primary market to mobilize Rs 150 crore.

Likewise, in the power business, Birla Power and Birla Electrical will be combined while in the engineering segment, Zenith Birla and Tunghabhadra Holding will go for a merger.