Aditya Birla Group Chairman Kumar Mangalam Birla said this partnership is an emphatic endorsement of the growth potential of India Credit: Twitter image

On Friday, Aditya Birla Fashion and Retail Ltd (ABFRL) said that its board had now approved plans to raise Rs 1,500 crore by issuing 7.8% stake on preferential basis to Flipkart Group owned by Walmart. The statement also added that the equity capital will be raised at Rs 205 per share.

ABFRL in a regulatory meeting stated that with this inclusion, the Flipkart group will be able to own 7.8% equity stake with them on a fully diluted basis. “The promoter and promoter group companies of ABFRL will hold about 55.13% upon completion of the issuance,” it added.

According to Kumar Mangalam Birla the Chairman of Aditya Birla Group, this partnership is an emphatic endorsement of the growth potential of India. He added that this move also showcases the company’s strong conviction in the future of the apparel industry in India; which is poised to touch $100 billion in the next five years.

Fashion retail in India is set for robust long-term growth due to strong fundamentals of a large and growing middle class, favourable demographics, aspiration for brands, and rising disposable incomes as stated by the chairman. Moreover, in this process, there is ought to be a rapid growth in technology infrastructure. “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,” he concluded.

Also Read: Flipkart acquires Walmart India’s wholesale business

The plan is to use this capital to strengthen ABFRL’s balance sheet and also further propel their growth trajectory. ABFRL also plans to scale-up its existing business aggressively where it holds firm, market-leading positions. This all while increasing their presence in the emerging high-growth categories such as athleisure, innerwear, ethnic wear and casual wear, establishing these as the new engines of growth for the company.

The company is also planning to accelerate the execution of its large-scale digital transformation strategy which will deepen the consumer connect of its brands, build strong omnichannel functionalities, expand the reach of its diverse brand portfolio and also augment its backend capabilities. This is all by positioning the company amongst the most comprehensive omnichannel fashion players in the country.

Additionally, the company has also entered into a commercial agreement in relation to the sale and distribution of its various brands.

Also Read: Vocal for Local: Assam govt, Flipkart collaborate to promote artisans

Latest Stories

Leave a comment

Leave a comment