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Aditya Birla group spends ₹2,000 crore on an MSME e-commerce venture

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  • Grasim Industries announces a foray into a business-to-business building materials e-commerce platform.
  • The platform will target SMEs in the building materials segment.
  • Construction materials procurement sector grew 14% over the past three years

Grasim Industries, a flagship company of the Aditya Birla Group, announced its foray into a business-to-business building materials e-commerce platform. It plans to invest ₹2,000 crore over the next five years.

“This investment adds a new, high-growth engine with clear ties across Grasim’s standalone businesses as well as those of its subsidiaries and associated companies,” the company said in a statement.

The new platform will target micro, small and medium enterprises (MSMEs) in the building materials segment and will be managed by a newly recruited leadership team from the digital ecosystem.

$GRASIM.NSE grew more than 4x in the 2020-21 rally of 380 – 1930 in the form of an Impulse and is currently undergoing a pullback correction. While it peaked with the rest of the market, one bright aspect of Grasim was that there was barely any volume distribution around its peak. Therefore, the price correction is expected to be only superficial in nature, although we can’t really negotiate much on the time portion of the correction as it could last up to a few months. For the foreseeable future it is expected to hover between 1650 – 1800 at the top and 1200 – 1000 at the bottom after which we could have a new boost up in the stock that could take it approximately and conservatively to a target of 3000+ levels the coming years. #ElliottWave

— (@piyushchaudhry) July 20, 2022

“The foray into B2B e-commerce is yet another strategic choice for a portfolio as it crystallizes our intent to invest in the new, fast-growing digital space. The Building Materials segment offers a huge scalable business opportunity with a proven path to profitability,” said Kumar Mangalam Birlachairman, Aditya Birla Group.

The overall building materials procurement industry in India has grown at a compound annual growth rate (CAGR) of 14% over the past three years. This industry is valued at $100 billion with a current digital penetration of just 2%.

“This foray would allow Grasim to leverage the large B2B ecosystem within the Aditya Birla Group,” Birla added.

The company believes that B2B e-commerce is a strong growth opportunity with attractive long-term returns and will bring great value to its stakeholders.

“The main value proposition would be an integrated procurement solution, including on-time delivery and a superior product range at competitive prices,” the company added.

In May, the company also announced that it is doubling its investment plans in the paint segment to ₹10,000 crore.

Grasim is a global producer of viscose staple fibers and viscose filament yarns, one of the largest producers of chlor-alkali, advanced materials, linen yarns and fabrics in India.

The group also entered the paint business and has six factories in different locations in India. Its subsidiaries — UltraTech Cement and Aditya Birla Capital — one of India’s largest cement producers and a leading player in diversified financial services in India.

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