Interview with chief executive, ABFS
Aditya Birla
Nuvo's merger with Grasim Industries and the subsequent demerger of Aditya
Birla Financial Services (ABFS) into a listed entity is expected to consolidate
all financial services businesses of the group under one roof. Ajay Srinivasan, chief
executive, ABFS, details the deal contours of the financial services business.
Business Standard: Q&A
Business Standard: Once Aditya Birla
Financial Services is listed after the demerger, what segments would be the
biggest contributor to growth?
Ajay Srinivasan: I
have said consistently that all businesses will grow under Aditya Birla
Financial Services. Growth will be there across the platform. But the
non-banking financial company (NBFC) business will obviously be a large
contributor. Housing finance will be a large contributor, as also asset
management and insurance. Life insurance growth is coming back. These four will
be the largest contributors.
Business
Standard: How will this transaction benefit market participants? By when
is it expected to be completed?
Ajay Srinivasan: For us,
this was a good time to unlock value. It is a big opportunity which does not
exist in the market. It will give the market an access to a wide array of
diversified financial services which gives both breadth and scale. This
transaction is expected to be completed by the fourth quarter of FY17 or the
first quarter of FY18.
Business
Standard: Now that ABFS will be listed, could this be taken as a precursor
of an initial public offering (IPO) for the life insurance business?
Ajay
Srinivasan: As ABFS will be listed, there is no plan to list the companies
under it, including Birla Sun Life Insurance. There is no immediate move
towards that.
Business
Standard: With two large life insurers, HDFC Life and Max Life, set to
merge, do you see any impact on your ranking?
Ajay
Srinivasan: Birla Sun Life Insurance ranks fourth among private life insurers and
we expect it to hold that ranking. We do not have a large bank partners like
the other insurers, though we would distribute our insurance products through
our payments bank.
Business
Standard: Are you looking to enter the general insurance space as well?
Ajay
Srinivasan: We already have Birla Sun Life Insurance and have recently
received approval to roll out our standalone health insurance business under
Aditya Birla Health Insurance, which through its differentiated products and
solutions will be relevant to our target consumers. However, we are not
planning to set up any separate general insurance company.
