The board of Aditya Birla Fashion and Retail Limited today approved the issuance of equity shares on a preferential basis to Flipkart Investments Private Limited adding to ₹1500 crore. The company has also entered into a commercial agreement in connection with the sale and distribution of various company brands.
Aditya Birla Fashion and Retail Limited said that the share capital will be raised in ₹205 per share. Flipkart will own a 7.8% equity interest in Aditya Birla Fashion and Retail Limited on a fully diluted basis.
The companies of the promoter and promoter group of Aditya Birla Fashion and Retail Limited will own approximately 55.13% once the issue is finalized.
“The investment agreement, among others, provides for some rights, such as preferential rights and the right of first refusal, which are for a limited period of between 1 and 5 years from the date of award of the shares or if the participation Investor’s shareholding is below a certain threshold, “said Aditya Birla Fashion and Retail Limited.
Kumar Mangalam Birla, Chairman of the Aditya Birla Group, said: “This partnership is an emphatic endorsement of India’s growth potential. It also reflects our strong belief in the future of the Indian garment industry, which is poised to reach $ 100 billion in the next 5 years. Fashion retail in India is poised for strong long-term growth due to the strong fundamentals of a large and growing middle class, favorable demographics, increased disposable income and aspiration for brands. The rapid growth of technology infrastructure will further accelerate this process. Over the years, we have made Aditya Birla Fashion and Retail Limited a strong platform to capture future growth opportunities in India. This partnership is a critical component of that strategy. “
Aditya Birla Fashion and Retail Limited plans to use this capital to strengthen its balance sheet and accelerate its growth trajectory.
“The company plans to aggressively expand its existing businesses where it maintains strong market leadership positions while increasing its presence in emerging high-growth categories such as underwear, sportswear, casual wear and ethnic clothing, establishing these as the new growth engines for the company, “said Aditya Birla Fashion and Retail Limited.
In addition, Aditya Birla Fashion and Retail Limited will aggressively accelerate the execution of its large-scale digital transformation strategy that will deepen the consumer connection of its brands, broaden the reach of its diverse portfolio of brands, develop strong omnichannel capabilities and increase its capabilities in backend. , positioning it among the most complete omnichannel fashion players in the country, “the company added.
Kalyan Krishnamurthy, CEO of Flipkart Group said: “Through this transaction with Aditya Birla Fashion and Retail Limited, we will work to make a wide range of products available to fashion-conscious consumers in 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 Indian garment industry. “
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