This was presented in the STM class (Strategic Management) in XIMB. This presentation is an information heavy presentation about the evolution of the AV Birla Group in the history of Indian market place. It talks about the investments, divestments, and the current position of the group - and encompasses the origin of the brand as well.

1. A V BIRLA GROUP
Presented by Group 4
Rishi Raj Singh
Rituparna Mohanty
Sandhyarani Sahoo
Shibashis Sahu
Shikha Sharma
Shounak Dasgupta
Shruti Ray
Legacy of Free Enterprise and Diversification
Sidharth Kumar Patra
Sobhan Pattanaik
Somak Ghosh
Somnath Chakraborty
Somya Nayak
Soumya Ranjan Sahoo

2. GENESIS OF BIRLA GROUP
Foundation of the Birla Group of companies laid by Seth Shiv Narain
Birla (Opium Business)
Jute Mill set up by G D Birla
Made huge profits during world war II
Companies owned by Birla increased from 61 to 105
Textile Mill established in Ethiopia
Aditya Birla set up the Indo-Thai Synthetic Company in Thailand.
Successfully ventured in south east asian countries
Aditya Group had four major ventures in South East Asia, viz., Indo
Thai Synthetics, Century Textiles and Thai Rayon in Thailand and
P.T. Elegant Textile Industry in Indonesia
Thai polyphosphate and Chemicals Co. Ltd was set up
Kumar Mangalam Birla took over as chairman and reorganized the
group into three sub groups viz., Hindalco, Grasim and AB Nuvo

3. Named after Aditya
Vikram Birla
Headquarters at
Aditya Birla Centre,
Mumbai
Operates in 40
Countries with
120000 employees
worldwide
Founded by Seth
Shiv Narayan Birla
in 1857
Third Largest
private sector
conglomerate with
$45 billion revenue
Largest player in
cement sector,
third largest in
telecom

4. The G D Birla Phenomena
G D Birla has always been a proponent of free enterprise and capitalism, wherein the private Indian
firms can achieve the highest growth possible.
Inception:
In 1912, he was thrown out of a meeting with the English businessmen.
When he approached Andrew Yule to convince him to sell off his jute mill, he was mocked for
dreaming so big.
GD, a leader in the making:
GD, as a youth leader, became the emissary of Gandhi and other left wing leaders, while also
becoming solicitors of the right wing Hindu Swaraj Party, led by Madan Mohan Malviya, Vallabhai
Patel and Lala Lajpat Rai.
The Birlas were always involved with society and charity – they helped Jamanlal Bajaj set up a
Marwari school in Bombay (1912), and set up the first high school in Pilani (1918).
Early Politics and the power of the press:
GD was a member of the legislative assembly as a representative of the Marwari commercial
interests.
The Birlas acquired Empire and Commerce (1920) and the Bengalee in 1922. From 1924-1927, GD
helped run Hindustan Times and took over the finances as well.
GD’s proclivity to become a constitutionalist showed in his opposition of the Non-Cooperation
movement.
He slowly moved towards the moderate party and concentrated more on business commitments.

5. The story of the Indian Capitalist
1930s to 1940s: The realignment with Gandhi and separation from extremist politics:
During this period, GD began to slowly distance himself from Lala and Malviya and finally cut off the
ties, although the Birlas continued to remain supporters of nationalism. He became the medium of
communication between Gandhi and the British unto the Independence of India. During a period
when most national leaders were jailed, he left for Britain and the USA to build ties for the future. He
was instrumental in the formation of the FICCI, the body that safeguarded Indian business interests as
against the European interests.
GD, a vanguard of capitalist economy:
When Nehru came to power, he began adopting a socialistic model of the Indian
economy. As a result the capitalistic model of the economy as opined for by Birla and
other business houses never really saw the light of day until 1978, when the Janata party
came to power.
Relations with the Indian National Congress:
The relationship of GD with the INC was bitter sweet throughout. Once a staunch ally of
Indira Gandhi, GD fell out of favours and became entangled in lawsuits when his advise
to IG over devaluation of the Indian rupee resulting in massive public outcry, which
resulted in Indira Gandhi’s criticism. During this time, the ties with the US also started
growing and under his guidance, India managed to lobby successfully for funding from
the World Bank. Lawsuits hit Birlas hard – attributed to stocks being deliberately
undervalued, tax evasions and setting up of plants without licenses.

6. AV BIRLA GROUP COMPANIES
ADITYA BIRLA CAPITAL ADVISORS
PRIVATE LIMITED
ADITYA BIRLA CHEMICALS (INDIA)
LIMITED
ADITYA BIRLA CHEMICALS
(THAILAND) LIMITED
ADITYA BIRLA FINANCE LIMITED
ADITYA BIRLA FINANCIAL SERVICES
GROUP
ADITYA BIRLA GRASUN CHEMICALS
(FANGCHENGGANG) LIMITED
ADITYA BIRLA GROUP POWER
PROJECTS
ADITYA BIRLA INSURANCE
BROKERS
ADITYA BIRLA MINERALS
ADITYA BIRLA MONEY
ADITYA BIRLA NUVO
ADITYA BIRLA RETAIL LIMITED
ADITYA BIRLA SCIENCE AND
TECHNOLOGY COMPANY LIMITED
ALEXANDRIA CARBON BLACK
AV CELL INC.
AV NACKAWIC INC.
BIRLA JINGWEI FIBRES COMPANY
LIMITED
BIRLA LAO PULP AND PLANTATIONS
COMPANY LIMITED
BIRLA SUN LIFE ASSET
MANAGEMENTBIRLA SUN LIFE
INSURANCE COMPANY
CAMEROON ALUMINA LIMITED
COLUMBIAN CHEMICALS COMPANY
DAHEJ HARBOUR & INFRASTRUCTURE
LIMITED
DOMSJÖ FABRIKER
ESSEL MINING AND INDUSTRIES
LIMITED
GRASIM BHIWANI TEXTILES LIMITED
GRASIM INDUSTRIES LIMITED
HINDALCO INDUSTRIES LIMITED
HINDALCO-ALMEX AEROSPACE
LIMITED
IDEA CELLULAR LIMITED
INDO PHIL COTTON MILLS
INDO PHIL TEXTILE MILLS
INDO THAI SYNTHETICS
LIAONING BIRLA CARBON COMPANY
LIMITED
MADURA FASHION & LIFESTYLE
MAHAN COAL LIMITED
NOVELIS INC.
PAN CENTURY SURFACTANTS INC.
PANTALOONS FASHION & RETAIL LIMITED
PT ELEGANT TEXTILE INDUSTRY
PT INDO BHARAT RAYON
PT INDO LIBERTY TEXTILES
PT INDO RAYA KIMIAPT SUNRISE BUMI
TEXTILES
SWISS SINGAPORE OVERSEAS
ENTERPRISES PTE LIMITED
TANFAC INDUSTRIES LIMITED
TERRACE BAY PULP MILL
THAI ACRYLIC FIBRE
THAI CARBON BLACK
THAI PEROXIDE COMPANY LIMITED
THAI RAYON
ULTRATECH CEMENT LANKA (PVT.) LTD.
ULTRATECH CEMENT LIMITED
ULTRATECH SUBSIDIARIES
UTKAL ALUMINA INTERNATIONAL LIMITED

7. COMPETITIVE LANDSCAPE
SECTOR AVBG
PLAYER
TOP
COMPETITOR
Branded
Apparel
Pantaloons Future Retail
Cooper Birla Cooper Hindustan
Cooper
Aluminiu
m
Hindalco Nalco
Telecom Idea Bharati Airtel
Carbon
Black
Birla Carbon Phillips Carbon
Black
Textiles Grasim 3M India
Chemicals Aditya Birla
Chemicals
Pidilite
Insurance Birla Sun Life LIC
Cement Ultratech Ambuja
Cement
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
M-CAP OF Aditya Birla Group VS
Competitor
AVBG Player Top Competitor

8. MAJOR SECTORS
Agri
Business
Carbon
Black
Cement
Financial
Services
Telecom Textiles Mining
Non-Ferrous
Metals
Retail Insulators
Ferro
chemicals
Chemicals

9. SECTOR-WISE CONTRIBUTION
0
2
4
6
8
10
12
14
16
18
20
Contribution To Group Turnover
%ofTurnover

10. BUSINESS DIVERSIFICATION STRATEGY
• Wide political and industry network from
the early days of Seth Baldeodas.
• New technological collaborations were
undertaken to modernize the existing
units. For instance, Hindustan Motors
tied up with Lord Nuffield to
manufacture the legendary Morris Minor.
• Diversification also served the purpose of
saving tax and retaining profits within the
company.
• In-house Training and Internship for
Diversification.
• The Birlas got 8 yrs of tax holidays, an
eight year holiday for business tax (sales
tax), eight year holiday for all remittances
of royalties and technical know-how fees
which normally attract a 20% tax.
GLOBAL PRESENCE OF THE GROUP:
- 120,000+ employees
- Operates in more than 40 countries
- Revenue - $45 Billion (2014)

11. DIVERSIFICATION
The variety of business interest of the group covers almost
all sectors of the Indian economy
Phenomenal diversification of business across time from the
middle of 19th century to early 21st century
The most diversified business in India
Served the purpose of saving taxes and retaining profits
within the company
In 1947, Birla group diversified into insurance, textile
machinery, automobiles, bicycles and plastics
Within 10 years, they further expanded into engineering,
tea, chemicals, cement, glass ,aluminum, shipping and
aviation

12. In-house Training and Internship
By 1964, the sons and the grandsons of the Birla
Brothers were actively involved in the business
They were given free hand to run the businesses
independently
Training within the family facilitated very fast
diversification
Senior Birlas were consulted for important decisions

13. CSR Activities of Aditya Birla Group
It has around 42 schools, where 45,000 children are
provided quality education.
Balwadis for elementary education
Pulse polio programs, mobile clinics, medical camps
and cleft lips
Vocational Training through Aditya Birla Rural
technology parks
Watershed development and construction of check
dams in villages
Awareness programs on anti-social issues

14. Public Goodwill and Takeaways
Keeping a clean image in public
Improves public sentiment to invest in the
company
Enhances the Aditya Birla brand credibility
Strengthens the Group's competitive advantage
through proactive, two-way communication among
its multiple internal and external stakeholders.
Collaborative partnerships with government helps
it leverage on the strong network of connections

15. LICENCES AND INCENTIVES
Strong Political Network among
national leaders and bureaucrats. Set
up 200 companies and 70
manufacturing units in India , South
East Asia and Africa
Formed MRPL(JV
between AVBG and
HPCL. Later sold its
stake in MRPL TO
ONGC
Received various incentives
like Tax, cheap land and
resources, public assets
through PSU divestment
post 1991 period. Birlas also
got eight years of tax
holidays ,sales tax holiday
and a assurance for import
duties to be enhanced from
10% to 30%.
1970
1980
1990

16. HUMAN RESOURCES AND CAPITAL
Highly loyal and efficient professionals were instrumental in setting up
and managing over 200 companies in India and South East Asia.
Key persons like Mr S.Mahansaria and Mr M.C Bagrodia played a vital
role in Indo-Thai synthetics and a new caustic project of caustic soda
plant.
ABMC the advisory body of ABG consists of senior group executives
who look after specific sectors. A review council has also been set up to
review the businesses of the group.
The Birlas had adequate Capital for new projects and expansion due to
G.D Birlas influence over Indian polity and financial institutions.
In 1943 G.D. Birla incorporated the United Commercial Bank.The ABG
benefitted from the numerous incentives and financial support by the
Government.

17. Mergers and Acquisitions
Free and Liberal
Economy after 1991
Strategy of AV Birla
Group to diversify into
different industries
Mergers and
Acquisitions
Mergers
• Indal with
Hindalco
• Jayashree Textile
with Indian
Rayon
• ABIL with ABNL
Acquisitions
•Nifty Copper Mine, Novelis , Alcan by
Hindalco
•Mount Gordon Copper Mine by
ABML
•Aluminium Rolling Mill and Wire rods
Facility from ARCIL
•Indian Rayon
•PSI Data Systems by Indian Rayon
Joint Ventures
• Almex USA
• Essar Power
Ltd.
• Sun Life Group
• AT&T Group

18. M&A Strategies
Control over different sectors
Downstream strategy provided a well-diversified
geographical market base and enhances stature in
downstream production
Stable cash flows
Provides synergy due to operational relatedness
Increase in the monopoly power of the companies
Entered telecom sector because of the socio-economic
development in India
Entered insurance market due to low entry barriers and
low cost of entry

19. Capital Generation
 The group has always maintained its ability to raise
capital and expand its business even during the period
when capital is short circulation. The company has
managed to raise capital through
 IPOs
 Rights issue
 GDR
 Euro issues
 Preference share and debentures

20. Corporate Restructuring
The group went for reorganising in the ownership, operational, or other
structures of a company for the purpose of making it more profitable, or
better organized for its needs
• Undertook a major restructuring by selling stakes in Indo Gulf
Fertilizer and then acquired controlling stakes in Indal. Hindalco
raised INR 2226.6 crores in 2006 (from it originally planned over INR
5000 crores, Rights issue) by offering the Rights Issue. This capital
raised was largely to acquire Novelis
• Its investments spans across a number of new businesses viz.,
financial services, telecommunication, insurance, garments,
etc.Nuvo’s subsidiary, Idea Cellular, the telecom company is the
largest group companies
• Grasim in 1992 raised USD 90 million through its GDR issue

21. Grasim : CSF of Textile Industry
SUPPLY CHAIN Strong, Integrated, lean
Separate departments for
a) Production planning, scheduling and warehousing.
B) Transportation & freight management, Inventory management & control
SCALE OF OPERATION Very High
a) largest production unit : Nagda, Harihar, Kharach etc
b) International : Birla Jingwei Fibres Company Limited in China
RAW MATERIALS High
a)Abundant :largest cotton acreage
b) yarn producers (Open--ended yarn , fabric Ring yarn ,fabric Textured yarn)
TYPE OF INDUSTRY Labour-intensive
a) Highest loomage in the world with contribution of more than 60 per cent to world
LABOUR High Availability
a)Availability of skilled labour and low labour costs
b) Cost advantage over other countries
CONSUMER DEMAND High
a)Consuming class is 80 per cent of the population
b) Disposable income increasing at increasing rate
GOVERNMENT SUPPORT Supportive
Technology Upgradation Fund Scheme (TUFS)
COMPETITION High
a) Fragmented industry
b) Supportive policies
c) Growing domestic and exports opportunities
d) Entry of MNC players

22. Hindalco: CSF of Manufacturing Industry
COST AND CAPITAL High
a) Aditya smelter: world beating cost structure
b) Raw material: High imports, e-auctions and mines that are located at a greater
distance from its smelter compared
c) Following integrated business model and economies of scale
OPTIMIZING
TECHNOLOGY
High
a) Smelter-power plant complex at Lapanga in Sambalpur
360,000 tonnes smelter : 6 x 150 MW coal : captive power.
b) R&D : Two centres at Belgaum and Taloja, both recognised by the Department of
Scientific & Industrial Research (DSIR)
c) 46 percent of Hindalco's aluminium product portfolio comprises VAPs, i.e. Flat
Rolled Products (FRPs) and extrusions.
RELATIONSHIP WITH
STAKEHOLDERS
a) Social, environmental and economic benefits for the communities
b) Waste generation and land filling
c) Community resources and rights
CUSTOMER
SATISFACTION
High
a) The Service Centre Network: for deeper market penetration and rural reach
b) Total Quality Management (TQM) and Environment Control (EC) cell: customer-
driven quality an enterprise-wide endeavour
LOCATIONAL
ADVANTAGES
High
a) operations: 10 states and one union territory in India: 600 ktpa of
aluminium.Renukoot in Uttar Pradesh, Belur in West Bengal, Silvassa in the union
territory of Dadra and Nagar Haveli, Hirakud in Odisha

23. HINDALCO
Aluminium:
Automotive and transport
Ceramics
Chemicals
Building and construction
Defence
Electricals and electronics
Industrial applications
Paints
Pharmaceuticals and packaging
Refractory
Copper:
Agrochemicals
Automotive and transport
Consumer durables
Electrical equipment
Railways
Wire and cable industry

24. Performance of Hindalco
10105.33
87695.49
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Revenue in INR Crores
Average Growth Rate: 37%
12001.71
29255.38
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
M-CAP in INR Crores

25. ALUMINIUM INDUSTRY ANALYSIS
Supply
Supply of aluminium is in excess and any deficit can be imported at low rates of duty.
Currently, the demand is stable while supply is in excess.
Demand
Demand for aluminium is estimated to grow at 6%-8% per annum in view of the low per
capita consumption in India. Also, demand for the metal is expected to pick up as the
scenario improves for user industries, like power, infrastructure and transportation.
Barriers to
entry
Large economies of scale. Consequently, high capital costs.
Bargaining
power of
suppliers
Most domestic players operate integrated plants. Bargaining power is limited in case of
power purchase, as Government is the only supplier. However, increasing usage of captive
power plants (CPP) will help to rationalize power costs to a certain extent in the long-term.
Bargaining
power of
customers
Being a commodity, customers enjoy relatively high bargaining power, as prices are
determined on demand and supply.
Competition
Competition is primarily on quality and price, as being a commodity, differentiation is
difficult. However, the recent spate of consolidation has reduced the competitive pressure
in the industry. Further, increasing value addition to aluminium products has helped some
companies protect themselves from the high volatilities witnessed in this industry.

26. PROSPECTS
China has been a marginally surplus producer of aluminium, while India
turned aluminium deficit in 2011 after being a marginal surplus producer
for many years. However, commissioning of new capacities will make
India surplus in aluminium in the near future.
Long term outlook for aluminium continues to remain strong with Global
aluminium demand expected to increase at a CAGR of 6%, with expected
growth of 9% till 2020. This growth rate, though strong, pales in
comparison with the stupendous rate at which Chinese aluminium
consumption has grown over the last decade.

27. Refined Copper Production Capacity
 India is net exporter of refined copper and importer of concentrate.
 All major deposits explored in sixties and seventies
 100 million tonne ore required for meeting installed smelting/refining
capacity against annual production of 3 million tonne.
 Huge opportunity exists in green field exploration & development of new
mines.

28. Financial
Services
29%
Telecom
29%
Fashion &
Lifestyle
26%
MFG
16%
Revenue Share
Aditya Birla NUVO

29. 1995 2014
Revenue USD 0.2 billion USD 4 billion
Businesses 5
De-risking through portfolio of 14 business
segments representing varied sectors of Indian
Economy
Market Cap USD 0.3 billion USD 3.5 billion
Brands ~6 ~30
Employees ~ 13,500
Anchored by strong management teams & about
49,000 employees
 Invested ~ USD 1.5 billion over these years to support growth
 Anchored by a strong Management Team
 The holding company of several companies of the group has diversified by
acquiring new businesses and entering afresh into new businesses. Highly
diversified portfolio of businesses
 1989-2008, grown from an asset base of INR 503 Cr to INR 7693 Cr that is 1500
%
 AB Nuvo plans to float a holding company that will control all the financial and
banking business of Nuvo 18.
ABNL- Highlights and Strategies

30. Idea Cellular
Market Capitalization USD 10 billion
Pan India revenue market share Ranks 3rd, at 17.1%
Total Minutes of usage 1.77 billion minutes per day
Subscribers 144 million
•Joint Venture Between Birla and AT&T
•Winner of 3G spectrum in 11 service areas which contribute more than 73% of Idea’s rev
•Idea holds 16% stake in the world’s largest Indus Towers Received capital
•Infusion of ` 3,750 Cr in June-July, 14 through QIP and Private Placement
Sales,
26432 Cr
0
5000
10000
15000
20000
25000
30000
Sales

31. BCG Matrix for ABNL Divisions
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
00.20.40.60.811.2
IndustryGrowthRate
Relative Market Share
Telecom
Asset Management
Fashion
Insurance
Manufacturing

32.  Strong execution and a clear focus quality of service and
consumers
 Encourages risk taking, R&D and Innovation
 Focus on meritocracy. Talent pool developed through a series of
planned exposures, assignments and training opportunities
(programmes namely “Step UP” and “Turning Point”)
 Running low cost, highly-efficient and vastly productive operations,
through our embedded culture of continuous improvement and
innovation
 New Initiatives like Wi-Fi, 3G and establishing itself as a brand
driven by a cause. making mobile telephony a way of life
 The management regularly follows the process of risk
identification, risk evaluation, risk prioritisation and development
of risk mitigation plans
Major Challenges- Idea Cellular
 regulatory decisions - The February 2012 license
cancellation by the Supreme Court
 November 2012 1800 MHz spectrum auctions with a very
high regulator recommended reserve price
 High costs: cost and manpower intensive ‘new subscriber
acquisition process’ was introduced
Strategies: Idea Cellular

33. ADITYA BIRLA GRASIM
•Grasim Industries Limited is an Indian building materials manufacturing company based in Mumbai,
Maharashtra
•The company is a subsidiary of Aditya Birla Group.
•In business of viscose staple fibre, rayon grade pulp, textiles, chemicals and cement.
•Grasim is the world's largest producer of viscose rayon fibre with about 24% market share.
•In 2003, L&T demerged Ultratech Cement and Grasim acquired majority stake in it.
•Post liberalization, raised US $90 million through GDR issue in 1992 and another US $ 100 million in
1994.
0
5000
10000
15000
20000
25000
30000
35000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Net Revenue
Net Revenue

34. GRASIM DIVISIONS
UltraTech Cement
• Grey Cement
• White Cement
• Putty
Viscose Staple Fibre (VSF)
• Largest producer
• 19% global share
Caustic Soda
• Capacity of 452K TPA
Grasim Bhiwani Textiles Limited
• Grasim and Graviera branded suitings

35. BCG MATRIX OF MAJOR BUSINESS
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
1.651.71.751.81.851.91.95
Relative Mkt Share
Relative Mkt Share

36. FUTURE PLANS:
Cement and VSF businesses most promising –
Grasim expanding in these sectors.
120,000 tpa VSF project, at Vilayat in Gujarat, is being commissioned
Profitability on VSF falling due to oversupply from China
Acquisition of the 4.8 Mn. tpa Gujarat Cement Unit of Jaypee Cement
Corporation Limited by UltraTech Cement Limited.
UltraTech commissioned – a 10,000 TPD clinkerisation plant together with a
cement grinding capacity of 1.45 Mn. tpa at Rajashree Cement, Karnataka;
a 1.6 Mn. tpa cement grinding unit in Odisha; and Thermal Power Plants of
30 mega watts at Rawan Cement Works and 25 mega watts each at
Rajashree Cement and Andhra Pradesh Cement Works.
Company’s Cement business’ installed capacity has been scaled up to
nearly 62 million tons

37. Thank you