The board of directors of Aditya Birla Fashion and Retail Limited (ABFRL) on May 24 approved raising of up to Rs 2,195 crore by way of preferential issuance of equity and warrants to an affiliate of GIC, Singapore’s sovereign wealth fund (GIC).
The board further resolved to increase the authorized share capital from existing Rs 1,010.15 crore to Rs 2,010.15 crore, subject to shareholders' nod.
GIC will invest Rs 770 crore now towards subscription of equity and warrants, followed by up to Rs 1,425 crore in one or more tranches within 18 months upon exercise of warrants, ABFRL said in a regulatory filing
Post the entire investment, GIC will own around 7.5% equity stake in ABFRL. Aditya Birla Group will hold around 51.9% stake in the company post the completion of this transaction.
Moneycontrol reported this news first on May 23.
Kumar Mangalam Birla, Chairman Aditya Birla Group said, “Indian Apparel industry is set for robust long-term growth due to strong fundamentals of a large and growing middle class, favourable demographics, rising disposable incomes and aspiration for brands. ABFRL has become one of the leading players in this market through its diversified portfolio of strong brands, wide distribution & an established business model and is well positioned to benefit from this opportunity. I am delighted to welcome GIC, a global institutional investor, as a long-term partner in the company’s exciting growth journey. An investment of this nature serves to underscore ABFRL’s strong position and dynamic growth model”.
ABFRL plans to use this capital to accelerate its growth engine built around strength of its current businesses along with a rapidly evolving play in emerging high-growth business models.
Commenting on the investment, Ashish Dikshit, MD of ABFRL said, “In the last few years, ABFRL has built a strong presence across all large and attractive segments of the Indian fashion market through organic & inorganic actions. This capital infusion will allow us to accelerate the growth of this platform of strong brands and well-established retail formats in the fast-growing branded apparel market & fortify our position as one of the leading players in the industry. ”
“ABFRL has a strong track record of building brands and its new business lines, including innerwear and ethnic wear, have strong structural tailwinds. We are confident that the company is well-positioned to continue its transformational journey into a future-ready consumer company powered by the growth of India,” said Choo Yong Cheen, Chief Investment Officer of Private Equity for GIC.
At 10:26 am, the shares of ABFRL were trading at Rs 271.45 apiece on the BSE, down 0.59 percent, while the benchmark Sensex was down 211.47 points or 0.39 percent at 54,091.53.
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