Aditya Birla group controlled Grasim Industries has sold its sponge iron business to a subsidiary company of Welspun Gujarat for a total consideration of Rs 1,030 crore.
Grasim run its sponge iron business under Vikram Ispat, which operates as a separate division of Grasim. Vikram Ispat had a turnover of over Rs 950 crore during the last financial year.
“Grasim would transfer its Vikram Ispat undertaking into a new special purpose vehicle, to be formed as a subsidiary company of Grasim. This would be funded by Welspun Power and Steel Limited, through equity investment,” Grasim said in a statement.
Welspun is a closely held unlisted company having its registered office in Gujarat. It manufactures sponge iron at its plant situated at Anjar. It is a subsidiary company of the $500 million Welspun group.
The transaction is expected to be completed within the next six months.
Grasim shares were down 0.47 per cent or Rs 10.50 to close at Rs 2217.20 at the Bombay Stock Exchange on Tuesday.