Flipkart is buying 7.8% stake in Aditya Birla Fashion for Rs 1500 crore at Rs 205 per share, latter said in a BSE statement.
Kumar Mangalam Birla, Chairman Aditya Birla Group said, “This partnership is an emphatic endorsement of the growth potential of India. It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100 billion in the next 5 years."
Aditya Birla Fashion said it will use this money to strengthen its balance sheet and accelerate its growth trajectory. The company plans to aggressively scale-up its existing businesses where it holds strong, market leading positions while increasing presence in emerging high-growth categories such as innerwear, athleisure, casualwear and ethnic wear, establishing these as the new engines of growth for the company, it said.
On completion of this transaction, Aditya Birla Fashion would have successfully executed a capital raise of Rs 2500 crore since 01 April 2020, despite the challenging macroeconomic conditions since the onset of COVID 19, the company said.
This deal will strengthen the range of brands offered on Flipkart's e-commerce platforms, including Myntra. Together with Myntra, Flipkart holds a prominent position in the online fashion market in India. This deal is going to accelerate its prominence in the fashion segment further.
"Through this partnership with ABFRL, we will work towards making available a wide range of products for fashion-conscious consumers across different retail formats across the country," said Kalyan Krishnamurthy, CEO, Flipkart Group.