Shares of Aditya Birla Capital surged around 3% on Wednesday to continue its three-day gaining streak as the company announced that it is exiting its insurance arm.
What Happened: AB Capital on Tuesday announced the sale of its entire stake in Aditya Birla Insurance Brokers Limited to Edme Services Private Limited. The company currently holds a 50.002% stake in the company. AB Capital along with Infocyber will be offloading the entire 100% of the issued and paid-up share capital of ABIBL to the Samara Capital Group unit for an upfront payment of ₹455 crore.
The company also informed that there may be additional consideration after the completion of five years after the sale which is conditional upon the fulfilment of certain conditions. The company informed that ABIBL contributed ₹684.52 crore (3.08%) to the company's consolidated revenue in FY 2021-22. The company expects to complete the transaction within four to six months.
The insurance arm of the company has been around for almost 20 years but has faced difficulties scaling up owing to the intense competition in the space.
Price Action: AB Capital shares were up 3.03% to trade at ₹151.25 on Wednesday afternoon.
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