- Flipkart will Acquire 7.8 percent stake in Aditya Birla Fashion for Rs. 1500 Crore. The equity capital will be raised at Rs. 205 per share
The Board of Directors of Aditya Birla Fashion and Retail Limited today approved the issuance of Flipkart Investments Private Limited equity shares on a preferential basis, amounting to approximately Rs. 1500 crore. Regarding the sale and distribution of the company’s different labels, the company has also entered into a commercial agreement.
The equity capital will be raised at Rs. 205 per share by Aditya Birla Fashion and Retail Limited. On a completely diluted basis, Flipkart will hold a 7.8 percent equity interest in Aditya Birla Fashion and Retail Limited.
Upon completion of the issuance, the promoter and promoter group companies of Aditya Birla Fashion and Retail Limited will hold about 55.13 percent.
According to Aditya Birla Fashion and Retail Limited, “The investment agreement inter-alia provides for certain rights, such as preemption rights and the right of first refusal, which are for a limited duration of between 1-5 years from the date of allocation of equity shares or if the investor’s shareholding falls below a certain threshold.”
“Kumar Mangalam Birla, Aditya Birla Group chairman, said,” This alliance is an emphatic endorsement of India’s growth potential. It also represents our deep confidence in the future of India’s apparel industry, which is poised to cross $100bn over the next five years. Because of the strong fundamentals of a large and growing middle class, favorable demographics, increasing disposable incomes, and aspirations for brands, fashion retail in India is set for strong long-term growth. This process will be further driven by the rapid growth of technology infrastructure.
We have formed Aditya Birla Fashion and Retail Limited into a powerful platform over the years to capture potential opportunities for growth in India. A crucial aspect of the approach is this relationship.
To improve its balance sheet and accelerate its growth trajectory, Aditya Birla Fashion and Retail Limited plans to use this money.
Aditya Birla Fashion and Retail Limited said, “The company aims to aggressively scale up its existing businesses where it holds strong market leadership positions while growing its presence in emerging high-growth categories such as innerwear, athleisure, casual wear, and ethnic wear, establishing them as the company’s new growth engines.”
Also, Aditya Birla Fashion and Retail Limited will aggressively accelerate the implementation of its large-scale digital transformation strategy to deepen the customer link of its brands, broaden the scope of its broad brand portfolio, build strong omnichannel features and increase its backend capabilities, positioning it among the most comprehensive omnichannel fashion players
Flipkart Group CEO Kalyan Krishnamurthy said, “Through this transaction with Aditya Birla Fashion and Retail Limited, we will work to make available a wide range of products across various retail formats across the country for fashion-conscious customers.” As we discuss the exciting potential for the apparel industry in India, we look forward to working with ABFRL and its well-established and robust fashion and retail infrastructure.