Aditya Birla Fashion to raise Rs2,195 crore of primary capital from GIC; stock under pressure

24 May 2022 , 02:13 PM

The board of Aditya Birla Fashion and Retail Limited in its meeting today approved the raising of up to Rs2,195 crore by way of preferential issue of equity and warrants to an affiliate of GIC, Singapore’s sovereign wealth fund.

GIC will infuse Rs770 crore now towards subscription of equity and warrants, followed by up to Rs1,425 crore in one or more tranches within 18 months upon exercise of warrants.

Post the entire investment, GIC will own a ~7.5% equity stake in ABFRL.

Aditya Birla Group will hold a ~51.9% stake in the company post the completion of this transaction.

ABFRL plans to use this capital to accelerate its growth engine built around the strength of its current businesses along with a rapidly evolving play in emerging high-growth business models.

Mr. Kumar Mangalam Birla, Chairman of Aditya Birla Group said, “Indian Apparel industry 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. ABFRL has become one of the leading players in this market through its diversified portfolio of strong brands, wide distribution & and established business model and is well-positioned to benefit from this opportunity.

He further added, “I am delighted to welcome GIC, a global institutional investor, as a long-term partner in the company’s exciting growth journey. An investment of this nature serves to underscore ABFRL’s strong position and dynamic growth model”.

Aditya Birla Fashion is currently trading at Rs270.20 down by Rs2.85 or 1.04% from its previous closing of Rs273.05 on the BSE. It touched intraday high and low of Rs275.35 and Rs269.25 respectively.