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Business Economy


ABFRL approves raising of Rs 1500 cr by way of preferential issue to flipkart group

ABFRL approves raising of Rs 1500 cr by way of preferential issue to flipkart group

Hyderabad, Oct 23 (UNI) Aditya Birla Fashion and Retail Limited (“ABFRL”) on Friday announced that it has 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, ABFRL said in a release here.

With this infusion, Flipkart Group will own 7.8 per cent equity stake in ABFRL on a fully diluted basis.

The promoter and promoter group companies of ABFRL will hold about 55.13 per cent upon completion of the issuance.

Aditya Birla Group Chairman Kumar Mangalam Birla, said, “This partnership 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 Birla added.

ABFRL plans to use this capital to strengthen its balance sheet and accelerate its growth trajectory.

Commenting on the deal, ABFRL Managing Director Ashish Dikshit said, this partnership has the potential to dramatically accelerate the growth of the apparel industry in India and reshape apparel commerce.

This deal also provides a tremendous opportunity to build scale of existing brands and expand its brand portfolio into emerging consumer segments.

Flipkart Group will strengthen the range of brands offered on its e-commerce platforms Flipkart and Myntra, deepening its partnership with ABFRL, and enhancing the range of premium international and Indian brands on offer.

Flipkart’s technology prowess will enhance ABFRL’s omni-channel capabilities, enriching customer experiences while continuing to provide access to premium loyalty programs and affordability constructs for which Flipkart is known.

Flipkart Group CEOKalyan Krishnamurthy, said, 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.

On completion of this transaction, ABFRL would have successfully executed a capital raise of Rs. 2500 Crore since April 1, 2020, despite the challenging macroeconomic conditions since the onset of COVID-19.

This is a testament to the Company’s bouquet of strong brands, well established operating model, respectable parentage, credible leadership and attractive business potential.

The transaction is subject to regulatory and other customary approvals.

UNI KNR CS 1646

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