Aditya Birla Fashion's shares 66 percent lower adjusting for demerger of lifestyle brands business

Aditya Birla Fashion and Retail shares slump 66% on demerger.

Shares of Aditya Birla Fashion and Retail (ABFRL) were lower by over 66 percent on May 22 - a technical adjustment and not a selloff - as the stock turned ex-demerger after the lifestyle brands business was spun off into a separate listed entity.

Investors saw the share price sharply lower by 66.56 percent at Rs 89.90 on the National Stock Exchange (NSE), down from its previous close of Rs 268.95 on Wednesday.

The fall reflects the demerger of ABFRL’s lifestyle brands vertical into a new company - Aditya Birla Lifestyle Brands (ABLBL). Existing shareholders will receive one share of ABLBL for every share held in ABFRL, as per the 1:1 ratio approved by the company.

ABFRL board approves Madura Fashion business demerger into separate listed entity

With Thursday being the ex-date, ABFRL shares were adjusted to exclude the value of the demerged business. The record date to determine shareholder eligibility for the demerger was set as May 22.

Under the restructuring, ABFRL will continue to operate its other verticals such as:

-Value retail under brands like Pantaloons and Style Up

-Ethnic wear including TCNS Clothing and designer partnerships

-Luxury and bridge-to-luxury segment through The Collective, Galleries Lafayette, and premium international brands

-Digital-first brands under the TMRW platform

The newly-carved entity ABLBL will house marquee fashion labels including Louis Philippe, Van Heusen, Allen Solly, Peter England, as well as global names like American Eagle and Forever 21. It will also manage the Reebok franchise and the innerwear segment under Van Heusen.

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