The company, to be rechristened Birla Financial Services Holdings, will be the umbrella firm for the group's financial-services operations. All future investments to be made by the group, like insurance and pension funds, in the sector are likely to routed through the holding company.

The group's financial-services operations head SK Mitra said that the 58 per cent held by the various manufacturing companies - like Grasim, Hindalco and Indian Rayon - in the flagship Birla Global Finance is in the process of being transferred to the new company.

The market value of Birla Global's shares transferred is around Rs 25 crore, Mitra said.

The 39.3 per cent stake the manufacturing companies hold in Birla Capital International Asset Management Co will be bought out by Birla Global for a consideration of Rs 20 pershare. The outgo of Birla Global, which holds 20 per cent in the asset management company, is Rs 12 crore.

Mitra said that the group's relationship with Capital International was being reviewed. "We are looking at providing the entire range of financial services like insurance and pension funds. As it happens, Capital International can only provide us with expertise in asset management. We, on the other hand, are looking for a partner who can help us with every aspect of financial services that we want to be in."

The valuation of the shares being transferred by the manufacturing companies of the group were undertaken by Price Waterhouse. This marks the group's first strategic move in recent times in the financial-services sector as part of the mega group's overall restructuring.

The asset-management venture with Capital International manages funds in excess of Rs 700 crore. The Capital group is one of the largest investment-management firms world-wide managing funds in excess of $270 billion.

BirlaMarlin, the group's securities arm, is a joint venture with the Thailand-based Seamico Marlin group, which has taken over Marlin Partners of the UK, with which the venture was initially forged.

Seamico Marlin is among the first foreign brokerages to establish equity-research operations five years back. The domestic venture provides stock broking and research services for the stock markets to institutional and high net-worth private clients in India and abroad.