Aditya Birla Fashion and Retail Ltd (ABFRL) on Friday stated its board has permitted plans to boost Rs 1500 crore by issuing 7.8% stake on a preferential foundation to Walmart-owned Flipkart Group. “Aditya Birla Fashion and Retail has today approved the raising of Rs 1500 crore by way of preferential issue to Flipkart Group. The equity capital will be raised at Rs 205 per share.
“With this infusion, Flipkart Group will own 7.8% equity stake in ABFRL on a fully diluted basis. The promoter and promoter group companies of ABFRL will hold about 55.13% upon completion of the issuance,” ABFRL stated in a regulatory submitting.
Aditya Birla Group Chairman Kumar Mangalam Birla stated this partnership is an emphatic endorsement of the expansion potential of India.
“It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100 billion in the next 5 years. Fashion retail in India is set for robust long-term growth due to strong fundamentals of a large and growing middle class, favourable demographics, rising disposable incomes and aspiration for brands. Rapid growth of technology infrastructure will further accelerate this process. Over the years, we have shaped ABFRL into a strong platform to capture future growth opportunities in India. This partnership is a critical component of that strategy,” he stated.
ABFRL stated it plans to make use of this capital to strengthen its steadiness sheet and speed up its progress trajectory.
The firm plans to aggressively scale-up its current companies the place it holds sturdy, market-leading positions, whereas growing presence in rising high-growth classes similar to innerwear, athleisure, informal put on and ethnic put on, establishing these as the brand new engines of progress for the corporate, it added.
ABFRL will aggressively speed up the execution of its large-scale digital transformation technique that can deepen the patron join of its manufacturers, develop the attain of its various model portfolio, construct sturdy omnichannel functionalities and increase its backend capabilities; positioning it amongst essentially the most complete omnichannel style gamers within the nation.
The firm stated it has additionally entered right into a business settlement in relation to the sale and distribution of its varied manufacturers.
Ashish Dikshit, MD of ABFRL, stated this deal additionally offers an incredible alternative to construct the size of current manufacturers and develop its model portfolio into rising client segments.
“At the Flipkart Group, we are focused on building new partnerships that will help us meet the demands of the discerning Indian consumer who seek quality and value.
“…We look forward to working with ABFRL and its well established and comprehensive fashion and retail infrastructure as we address the promising opportunity of the apparel industry in India,” Kalyan Krishnamurthy, CEO of Flipkart Group, stated.
The transaction is topic to regulatory and different customary approvals. Shares of Aditya Birla Fashion Retail had been buying and selling 3.19 % increased at Rs 158.30 apiece on BSE.
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