Birla likely to raise stake in Hindalco

Mumbai: The Aditya Birla Group flagship Hindalco Industries today said its promoters are looking at increasing their stake in the company through open market operations.

"The founders are looking at opportunities for raising stake in the company through the creeping acquisition route," Aditya Birla Group Chairman Kumar Mangalam Birla told the shareholders at the company's 52nd annual general meeting here.

Chairman of Aditya Birla Group, Kumar Mangalam Birla. Punit Paranjpe/Reuters

The decision comes in the wake of the fall in share price following weak market sentiment. The stock is trading at nearly half of (-46.7 percent) its price now from its yearly high.

On the BSE, the Hindalco counters closed 3.8 percent lower at Rs 134.15 today, while the main index shed 199 points or 1.22 percent.

This is a far cry from a 52 week high of Rs 251.90 and very close to the yearly low of Rs 128.55. The company today had a market capitalisation of Rs 25,683 crore.

According to stock exchange data, the promoters' stake in the country's largest aluminium company stands at 32.06 percent as on 30 June. Among other stakeholders, FIIs held 30.83 percent, domestic institutions have 12.84 percent and others hold 24.27 percent in the company.

The current rupee depreciation is likely to help the company's overall business due to higher exports in this fiscal, the company said. "We expect our export revenue to touch Rs 7,500 crore this year, which is 31 percent of our total revenue," Birla said.

Meanwhile, the company has lined up Rs 10,000 crore capex for its three mega projects--Mahan Aluminium, Aditya Aluminium and Utkal Aluminium this year.

Earlier, in his initial remarks, Birla said, the three alumina projects were at an advanced stage of execution with a capital outlay of $5 billion.

There were several delays in Mahan and Aditya Aluminium projects due to approvals in land acquisition and environmental clearance, he said in his replies to the shareholders.

"Let me reiterate that when these projects, along with those which are currently on the drawing board, are commissioned, your company would be a 1.7-million tonne aluminium behemoth with 6 million tonne refining capacity," Birla said.

Given the low debt-equity ratio of 0.4:1, there is huge headroom to borrow, Birla pointed out.

The company will also spend Rs 700 crore on expanding capacity at its second copper unit at Dahej, he said.

Meanwhile, the company would shift the flat rolled products project from the Novelis plant at Rogerstone, Britain to Hirakund in India by the end of this year.

Hindalco is also making alternate arrangements in sourcing coal till its coal block for the Mahan project is approved, Birla said.

The Mahan coal block has been referred to an Empowered Group of Ministers for approval, which has been constituted for the purpose of deciding on forest clearance for coal blocks.

"The company has already made detailed presentations and is hopeful of a favourable decision by the EGoM, considering the merits of the case," Birla said.

He also said the company is open to opportunities to buy coal blocks overseas, but did not elaborate.

PTI