ABFRL board approves Madura Fashion business demerger into separate listed entity

The demerger is expected to unlock significant value for the shareholders of ABFRL

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26 Aug, 2025 12:21

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The Board of Directors of Aditya Birla Fashion and Retail Ltd (ABFRL), at its meeting on April 19, approved the proposal of vertical demerger of business from ABFRL into a newly incorporated company named Aditya Birla Lifestyle Brands Ltd. (ABLBL), which will be listed separately on completion of the demerger.

The announcement comes after the company's board at its meeting on April 1, authorised the management of the company to evaluate the vertical demerger of Madura Fashion & Lifestyle business.

The demerger is expected to unlock significant value for the shareholders of ABFRL as each of the listed entities will have their own distinct capital structures, independent growth trajectories, and value creation opportunities, the company said in a statement.

The demerger will be implemented through an NCLT scheme of arrangement and upon its completion, all shareholders of ABFRL will have identical shareholdings in both the companies.

The newly-listed entity Aditya Birla Lifestyle Brands Ltd. (ABLBL) will house the business consisting of:
--Lifestyle brands - Louis Phillippe, Van Heusen, Allen Solly & Peter England
--Casual wear brands - viz. American Eagle & Forever 21
--Sportswear brand - Reebok
--Innerwear business under the Van Heusen brand

Meanwhile, Aditya Birla Fashion and Retail Ltd. (ABFRL) will house the remaining businesses. They are:

--Value Retail - Value and masstige fashion retail play under Pantaloons & Style Up
--Ethnic Portfolio - One of India’s most comprehensive ethnic wear portfolios covering multiple occasions, price points, and consumer segments, including designer wear partnerships and a recently acquired portfolio of TCNS brands
-Luxury - A fast-growing bridge to luxury & luxury platform of The Collective, Galleries Lafayette and select luxury brands--Digital brands - TMRW – a leading portfolio of digital-first fashion brands

Upon completion of the demerger, the shareholders of ABFRL will get one share of ABLBL for every share in ABFRL, in addition to their existing shareholding in ABFRL.

Shares of ABFRL on April 19 closed 0.89 percent higher at Rs 231.60 apiece on BSE.

ABFRL further said that the business assets and liabilities will be split between the two companies in accordance with the prescribed regulatory provisions. In line with this, the overall ABFRL borrowing, which is estimated to be around Rs 3,000 crore as of 31st March 2024, will be split between the two companies. The estimated debt to be transferred to ABLBL will be Rs 1,000 crore, and the balance will continue to stay with ABFRL.

Moreover, within 12 months after the completion of the demerger, ABFRL plans to raise about Rs. 2,500 crore equity capital to "strengthen its balance sheet and fund the growth of the remaining businesses."

The company’s promoter group will fully support the proposed equity raise.

The proposed demerger will be subjected to necessary approvals from shareholders, creditors, regulators, along with other customary approvals, it added.