The board of the Aditya Birla Fashion and Retail (ABFRL) has approved the raising of Rs. 2,195 crore from Singapore GIC sovereign wealth fund. GIC will invest Rs 770 crore in subscription for shares and outstanding warrants exceeding up to Rs 1425 crore in a single or multiple tranches within 18 months of exercise of the warrants. Once the investment is complete, GIC will hold an approximate 7.5% stake in ABFRL while Aditya Birla Group will hold an approximate 51.9% stake in the company.
ABFRL will use the proceeds to accelerate its growth engine, built around the strength of its current business, alongside fast-paced play in emerging high-growth business models. The Transactions are tentative to regulatory and customary approvals.
Kumar Mangalam Birla, Chairman of Aditya Birla Group, said that The Indian apparel company is all set for a stable long-term boost based on strong fundamentals of a large and growing middle class, favorable demographics, growing disposable income, and aspirations for manufacturers.
To continue his statement he said that with its large portfolio of strong companies and brands, massive distribution, and established business models, ABFRL has become one of the major players in this industry and is fast growing to capitalize on this opportunity. He is delighted to welcome GIC, a global institutional investor, as a long-term companion in the exciting and growing adventure of this business journey. Funding of this nature underscores the strong role of ABFRL and its dynamic growth model.
During the launch, Ashish Dikshit, MD of ABFRL said that the company has built a strong presence in all major and attractive segments of the Indian fashion market in recent years through organic and inorganic moves.
He also mentioned that this capital leaven will allow us to accelerate the growth of this platform of robust brands and well-known retail formats within the fast-growing branded apparel market and strengthen our position as a top player. We look forward to benefiting from GIC's significant experience investing in companies around the world and its long-term focus as we plan to expand our footprint and increase our digital play significantly in the coming years to stay ahead of unexpected developments in consumer behavior.
Choo Yong Cheen, Senior Personal Equity Funding Manager at GIC, stated that the company is delighted to partner with Aditya Birla Fashion and Retail to bring its longstanding capital and resources to support the next segment of growth.
“ABFRL already has a strong background of building brands and their new business strategies, including innerwear and ethnic apparel, have strong structural momentum. We are very sure that the company is top-notch to continue its innovative journey into a long-term consumer company by India's growth,”.
With sales of Rs 8,136 crore and a retail area of 9.2 million square meters, ABFRL sells clothing and accessories from manufacturers including Louis Philippe, Van Heusen, Allen Solly, and Peter England.