Kesoram Industries Ltd,
a flagship company of the B.K. Birla Group of Companies, said that its board to spin-off its Tyre Business (Birla Tyres) by demerging this Undertaking as per the "demerger" provisions in the Income Tax Act,1961 into a Resulting Company, Birla Tyres Ltd (BTL).
The announcement was made after market hours.
Upon grant of the requisite approvals, BTL will also become a listed company with its shareholding pattern mirroring Kesoram, as per BSE filing.
The appointed date for such Demerger will be on commencement of business i.e. January 01, 2019.
The proposed demerger is part of an ongoing exercise undertaken by Kesoram over the past few months in further realigning and recalibrating operations. The objective has been to transform each business into entities that are market driven in their approach, the company said in the filing.
For BTL, especially, the proposition and its implementation will open new growth vistas as it looks at opportunities with renewed vigour. The process is expected to act as a stimulant for further investments into BTL.
Resultantly, BTL will be benefitted through the revitalising of its existing product portfolio range by extension of reach into a much wider spectrum of tyre segments and markets; and leveraging of the positive brand image of Birla Tyres and the enormous brand equity of the "Birla" name to take on a rapidly growing yet discerning tyre market, the company added.
With the proposed spin-off, Kesoram's focus on both its businesses viz. Cement and Tyre will get even further sharpened and pave the way for robust growth.