Birla to raise its stake in Hindalco

Aditya Birla Group Chairman Kumar Mangalam Birla plans to take majority control of Hindalco Industries Ltd., India’s biggest aluminum producer, to forestall a takeover in what’s potentially a record year for metals and mining mergers. “I would like our stake to be more than 50 per cent and, if not, at least 40 per cent” in the next two years, Birla said on Monday in an interview in Mumbai. His family owns 31.4 per cent of the $5.6 billion company, according to its Web site. “The chairman is looking at raising stake in Hindalco to at least 40 per cent,” Pragnya Ram, spokeswoman for the parent Aditya Birla Group told Reuters. Ram said that Indian law allowed founders to raise their stakes in their companies by a maximum of five per cent each year. A five-year rally in metals has spawned $123 billion of takeovers in the mining and metals industry this year, on course to beat last year’s record $144 billion, according to Bloomberg data. Hindalco shares rose 21 per cent on speculation of an acquisition since Rio Tinto Group agreed to buy Alcan Inc. on July 12 to form the world’s biggest aluminum maker. “Hindalco has yet to decide if it would bid for metal assets that Rio may sell to help fund its takeover of Alcan, Birla said. Defensive measures The $24 billion Birla group is one of India’s oldest family owned businesses with interests in metals, cement, financial services, telecommunication and fertilisers. Birla was ranked 86th on the Forbes list of the world’s richest people last year. Global metal producers have been putting defensive measures in place after Mittal Steel Co.’s $38.3 billion purchase last year of Arcelor SA and Tata Steel Ltd.’s acquisition of U.K.’s Corus Group Plc for $12.9 billion in January. “We haven’t really thought about it and have held no talks with Rio Tinto,” Birla said, adding that “At the moment, we are focusing on integration of Novelis with Hindalco”. Hindalco last week agreed to buy the remaining 45 per cent of India’s Utkal Alumina International Ltd. it didn’t own from partner Alcan. Alcan said in April that it didn’t have enough influence in the venture. Hindalco is tripling aluminum production in India to 1.5 million tons by 2012 to become one of the world’s five largest producers. The company is also setting up three alumina plants to ensure supply of the main aluminum making raw material. Idea plans infrastructure arm Mumbai, DHNS: Idea Cellular Ltd, a Aditya Birla Group enterprise, on Tuesday, secured the Board clearance to set up a wholly owned subsidiary for possible transfer of passive infrastructure. The Aditya Birla Group company’s move to spin off a subsidiary for its passive infrastructure is considered very timely, maintain industry observers. Simply put, to maintain the current growth trends, India needs to build two times the cellular infrastructure it has created over the last 12 years within the next 36 months. The move, in addition to increasing operational efficiency, will also enable these companies to unlock value for its shareholders. More importantly, this will also help service providers share towers. Meanwhile, Idea Cellular has posted a net profit after tax of Rs 193.31 crore for the quarter ended June 30, 2007 as compared to Rs 30.07 crore for the quarter ended June 30, 2006. Total Revenue has risen from Rs 597.47 crore for the quarter ended June 30, 2006 to Rs 908.83 crore for the quarter ended June 30, 2007 . As per the consolidated results, the Idea Group has posted a net profit after tax of Rs 308.52 crore for the quarter ended June 30, 2007 as compared to Rs 85.93 crore for the quarter ended June 30, 2006. Total revenue has increased from Rs 902.26 crore for the quarter ended June 30, 2006 to Rs 1477.64 crore for the quarter ended June 30, 2007.