In February 2024, Grasim Industries Limited entered India’s competitive paint industry by launching the brand Birla Opus with a comprehensive range of high-quality products for the decorative paint segment. The company planned to invest ₹100 billion over the next three years and to open six manufacturing facilities across India by 2025, targeting the number two position in the market. In 2024, the estimated value of India’s decorative paints industry was ₹700 billion, with double-digit growth year-on-year. Grasim Industries Limited was hoping to capture 5–6 per cent of the market with the new Birla Opus brand in its first year by using the group’s capabilities, market knowledge, and brand equity. The company had to decide whether to pursue a product-centric growth strategy or an aggressive promotion-focused approach. In addition, given the strength of the market’s established competitors, was it the right decision to invest ₹100 billion in the new venture? Calculating projected future cash flows and the net present value of the project was necessary to determine the right strategy.
Established in 1986, Bikaji Foods International Ltd. (Bikaji) began making traditional Indian snacks and became a leading producer of ethnic namkeen and sweets, boasting over 300 diverse products. With a 9.5 per cent market share and INR 19.6 billion in revenue, it ranked third in India. Operating in 23 Indian states and 25 countries globally, its exports contributed 4 per cent of total sales. Since March 2024, Bikaji has aimed for a 12 per cent market share over three years, focusing on capacity optimization, rural market penetration, and profit margin improvement. Bikaji targeted untapped Indian regions, alongside exploring options like quick-service restaurants, healthy snacks, and export expansion. Expanding in India’s diverse culinary landscape demanded careful strategy to meet financial goals.
On August 11, 2016, the chairman of Aditya Birla Group (ABG) announced that ABG would merge Aditya Birla Nuvo Limited (ABNL) with Grasim Industries Limited (Grasim). ABG’s board also proposed to demerge Aditya Birla Financial Services Limited, a subsidiary of ABNL, from the newly merged Grasim. Financial analysts speculated that the merger was planned to fund ABNL’s telecommunication business before an upcoming spectrum sale and the launch of a strong, competing telecommunication company. The investor community, particularly minority shareholders, were concerned about the merger and felt that ABG’s main motive for the merger was to increase its stake in Grasim. What were the rationales for the merger? Would the promoter’s holding increase after the merger, as the shareholders perceived? Was the share swap ratio between ABNL and Grasim justified? Would there be a post-merger synergy creation, and which of the two companies would transfer wealth to the other? Should the shareholders vote in favour of the merger?
Ricoh India Limited, a subsidiary of Ricoh Japan, failed to submit its quarterly results in September and December 2015, leading the Bombay Stock Exchange to move the company’s shares from the B category (companies with small to mid-capitalization rates) to the Z category, which included companies that had failed to comply with listing requirements or had failed to resolve investor complaints. Although the company claimed that it had adhered to corporate governance standards and high ethical conduct, it admitted to having falsified its accounting records. Between March 2016 and May 2016, the company’s shares lost 42.3 per cent in market value. What was the impact for the company’s shareholders? After the falsification of the company’s financial statements was made public, should an investor continue to hold the Ricoh India shares, or divest?