Flipkart to pickup 7.8% equity stake in Aditya Birla Fashion & Retail for Rs. 1500 Crore

0 5,993

Biznextindia : The Board of Aditya Birla Fashion and Retail Limited (ABFRL) on Friday approved 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.

The promoter and promoter group companies currently hold about 59.79% stake in ABFRL and upon completion of the issuance the promoter’s stake will reduce to 55.13%.

“ABFRL plans to use this capital to strengthen its balance sheet and accelerate its growth trajectory. The company plans to aggressively scale-up its existing businesses where it holds strong, market leading positions while increasing presence in emerging high-growth categories such as innerwear, athleisure, casualwear and ethnic wear, establishing these as the new engines of growth for the company” the company said in a stock market filing.

“Furthermore, ABFRL will aggressively accelerate execution of its large-scale digital transformation strategy that will deepen the consumer connect of its brands, expand reach of its diverse brand portfolio, build strong omni-channel functionalities and augment its backend capabilities; positioning it amongst the most comprehensive Omni-channel fashion players in the country” it added.

“This partnership is an emphatic endorsement of the growth potential of India. It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100bn 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, favorable 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” Mr. Kumar Mangalam Birla, Chairman Aditya Birla Group said.

“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. Through this transaction with ABFRL, we will work towards making available a wide range of products for fashion-conscious consumers across different retail formats across the country. 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” Mr. Kalyan Krishnamurthy, CEO of Flipkart Group said.

Leave A Reply

Your email address will not be published.