Aditya Birla Fashion and Retail Limited (ABFRL) stated on Tuesday that its board has approved the raising of up to Rs 2,195 crore from Singapore’s sovereign wealth fund, GIC, by way of preferential issuance of equity and warrants.
GIC will invest Rs 770 crore now towards subscription of equity and warrants, and follow it up by pumping in Rs 1,425 crore in one or more tranche within 18 months. After the investment, GIC will own ~7.5 per cent equity stake in ABFRL, while Aditya Birla Group will hold 51.9 per cent stake in the company.
The transaction is subject to regulatory and other customary approvals.
This capital will be used by ABFRL to accelerate its growth and build around its business, along with a rapidly evolving play in emerging high-growth business models.
Aditya Birla Group Chairman Kumar Mangalam Birla 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,” further adding that an investment of this nature serves to underscore ABFRL’s position and growth model.
Ashish Dikshit, MD of ABFRL said that capital infusion will allow them to accelerate the growth of the platform of strong brands and well-established retail formats, and fortify their position as one of the leading players in the industry.
Chief Investment Officer for GIC, Choo Yong Cheen, said, “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”.
ABFRL has a network of 3,468 exclusive stores, 6,515 points of sale in department stores and 28,585 multi-brand outlets across India as on March 31.
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