A strategic shift is underway at Aditya Birla Real Estate Ltd (ABREL). The board has approved a Rs 3,498 crore deal to divest its Pulp and Paper unit in Lalkuan, Uttarakhand, to ITC Limited — marking a decisive pivot back to its core focus: real estate. The sale comes as the conglomerate moves to unlock value and sharpen its business priorities amid an aggressive expansion drive.
The agreement between ABREL and ITC involves a lump sum consideration of Rs 3,498 crore, subject to certain adjustments, and hinges on regulatory approvals, including those from the Competition Commission of India and ABREL’s shareholders.
In a press release issued on March 31, ABREL stated that the divestment is part of a value unlocking strategy and will enable the company to pursue growth in its real estate business.
R K Dalmia, Managing Director of ABREL, said, “The divestment of the Pulp and Paper undertaking by ABREL is a strategic portfolio choice and unlocks value for the shareholders of ABREL. The company has embarked on a transformational growth phase, and this move will further sharpen its focus on real estate to drive sustained value creation.”
He added, “Over the years, CPP has become synonymous with strong performance and high sustainability standards. To take it to the next level in size and value, the company is pleased to have found in ITC, a credible and well-established player.”
JM Financial Limited served as the exclusive financial advisor while AZB & Partners provided legal counsel to ABREL on the transaction.
For ITC, a market leader with over 1 million tonnes per annum of paper production capacity across four states, the acquisition marks a strategic expansion. It had been vying with West Coast Paper Mills to acquire Century Pulp and Paper.
For the Aditya Birla Group, the sale aligns with its broader strategy of reallocating capital. The conglomerate has recently expanded into high-capex sectors like paints, jewellery retailing, and real estate — necessitating sharper financial maneuvering to sustain its diversified interests in metals, cement, retail, telecom and financial services.
