● ABFRL to raise Rs 1500 Cr from Flipkart
● With this infusion, Flipkart Group will own 7.8% equity in ABFRL on a fully diluted basis
● Capital raise to further bolster ABFRL balance sheet and accelerate growth trajectory
● Partnership to transform apparel commerce in India and enable ABFRL to emerge as a strong omni-channel player
Bengaluru, NFASPost: Aditya Birla Fashion and Retail Limited (“ABFRL”) has approved the raising of Rs. 1500 croe by way of preferential issue to Flipkart Group.
The company’s move comes at a time when leading ecommerce and offline players are joining hands to bring their synergy to tap the growing opportunity in the Indian retail business landscape.
In a regulatory filing, the company said the equity capital will be raised at Rs 205 per share. With this infusion, Flipkart Group will own 7.8% equity stake in ABFRL on a fully diluted basis.
The promoter and promoter group companies of ABFRL will hold about 55.13% upon completion of the issuance.
Commenting on the new tie-up with Flipkart, Aditya Birla Group Chairman Kumar Mangalam Birla said the partnership is an emphatic endorsement of the growth potential of India.
Apparel industry
“It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100bn in the next 5 years. Fashion retail in India is set for robust long-term growth due to strong fundamentals of a large and growing middle class, favorable demographics, rising disposable incomes and aspiration for brands,” said Aditya Birla Group Chairman Kumar Mangalam Birla.
Aditya Birla Group Chairman Kumar Mangalam Birla said 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,” said Aditya Birla Group Chairman Kumar Mangalam Birla.
ABFRL plans to use this capital 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.
Digital strategy
Furthermore, ABFRL will aggressively accelerate execution of its large-scale digital transformation strategy that will deepen the consumer connect of its brands, expand reach of its diverse brand portfolio, build strong omni-channel functionalities and augment its backend capabilities; positioning it amongst the most comprehensive Omni-channel fashion players in the country.
Commenting on the deal, ABFRL Managing Director Ashish Dikshit said the company looks forward to this partnership
with Flipkart Group, and our collective journey to delight customers of a young and aspirational India.
“Given the complementary strengths of ABFRL and Flipkart Group, this partnership has the potential to dramatically accelerate the growth of the apparel industry in India and reshape apparel commerce,” said ABFRL Managing Director Ashish Dikshit.
ABFRL Managing Director Ashish Dikshit said the deal also provides a tremendous opportunity to build scale of existing brands and expand its brand portfolio into emerging consumer segments.
Indian brands
Flipkart Group will strengthen the range of brands offered on its e-commerce platforms Flipkart and Myntra, deepening its partnership with ABFRL, and enhancing the range of premium international and Indian brands on offer.
Flipkart’s technology prowess will enhance ABFRL’s omni-channel capabilities, enriching customer experiences while continuing to provide access to premium loyalty programs and affordability constructs for which Flipkart is known.
Commenting on the new initiative of the company, Flipkart Group CEO Kalyan Krishnamurthy at the Flipkart Group is focused on building new partnerships that will help us meet the demands of the discerning Indian consumer who
seek quality and value.
“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,” said Flipkart Group CEO Kalyan Krishnamurthy.
Capital raising
On completion of this transaction, ABFRL 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. This is a testament to the Company’s bouquet of strong brands, well established operating model, respectable parentage, credible leadership and attractive business potential. The transaction is subject to regulatory and other customary approvals.
Aditya Birla Fashion and Retail Limited is India’s largest pure-play fashion and lifestyle company with a strong bouquet of leading fashion brands and retail formats. The Company has a network of 3,004 stores, presence across approximately 23,700 multi-brand outlets with 6,700+ point of sales in department stores across India.
The Flipkart Group is one of India’s leading digital commerce entities and includes group companies Flipkart, Myntra, and PhonePe. Started in 2007, Flipkart has enabled millions of consumers, sellers, merchants, and small businesses to be a part of India’s e-commerce revolution, with a registered customer base of over 250 million, offering over 150 million products across 80+ categories.
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