InvestorQ : Why has Grasim opted to sell out its fertilizers business to Indo Rama?
Archita Jajjoo made post

Why has Grasim opted to sell out its fertilizers business to Indo Rama?

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Niti Shenoi answered.
7 months ago
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Grasim of the Birla group on 12 November, while announcing its results, announced the sale of its fertilizers business to Indo Rama for a total consideration of Rs.2649 crore. This was part of the plan to get out of non-core businesses.

The fertilizer business of the Aditya Birla group, it may be recollected, is housed under Indo Gulf which will be now sold by way of slump sale to Indo Rama. That means it is just a total valuation of the business, without aggregating assets or liabilities.

There is a strong reason why Grasim has been looking to unwind its non-core business. It wants to ensure that the value generated by the monetization of such assets can be used to invest in the core businesses, which are the focus area for Grasim.

Indo-Gulf has a 1.2 MTPA total fertilizer capacity focused on urea and offers perfect value addition to the long term plans of Indo-Rama. While the deal has been signed, it would be subjected to necessary regulatory approvals and these include the Competition Commission of India or CCI and the NCLT.

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