Flipkart to Acquire 7.8 Percent Stake in Aditya Birla's Fashion Arm for INR 1500 Crore

Flipkart to Acquire 7.8 Percent Stake in Aditya Birla's Fashion Arm for INR 1500 Crore

E-commerce giant, Flipkart is all set to acquire a 7.8 percent stake in Aditya Birla Fashion and Retail Limited (ABFRL) for Rs 1500 crore. An official statement by the Aditya Birla Group announced on Friday that the equity will be raised at Rs 205 per share. The promoter and promoter group companies of ABFRL will hold about 55.13 percent upon completion of the issuance. Upon completion of the transaction ABFRL would have successfully executed a capital raise of 2500 crore since April 2020, despite the challenging macroeconomic conditions since the onset of COVID 19.

As ABFRL plans to move aggressively in the Indian fashion retail market, the fresh fund will be utilized to strengthen its balance sheet and accelerate its growth trajectory. ABFRL is also moving ahead to create a strong 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. Large scale digital transformation is another major agenda for ABFRL which will help the firm positioning itself amongst the most comprehensive Omni-channel fashion players in the country.

Kumar Mangalam Birla, Chairman Aditya Birla Group said, “This partnership …reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100 bn in the next 5 years. Rapid growth of technology infrastructure will further accelerate this process. Over the years, we have shaped ABFRL into a strong platform to capture future growth opportunities in India. This partnership is a critical component of that strategy.”

The deal will amplify Flipkart Group’s range of brands offered on its e-commerce platforms and enhancing the range of premium international and Indian brands on offer. On the other hand Flipkart’s technology prowess will enhance ABFRL’s omni-channel capabilities, enriching customer experiences.

Kalyan Krishnamurthy, CEO, Flipkart Groupsaid, “Through this transaction with ABFRL, we will work towards making available a wide range of products for fashion-conscious consumers across different retail formats across the country. We look forward to working with ABFRL and its well established and comprehensive fashion and retail infrastructure as we address the promising opportunity of the apparel industry in India.”