Aditya Birla Fashion jumps over 13 per cent after Flipkart shows investment interest

Aditya Birla Fashion & Retail Limited (ABFRL) announced on Friday that it has approved the raising of Rs 1,500 crore to India's leading digital commerce group i.e. Flipkart Group. The equity capital will be raised by way of a preferential issue at Rs 205 per share. Reacting to the news, the share gained more than 13 per cent on BSE.

With this capital infusion, Flipkart will own a 7.8 per cent equity stake in ABFRL on a fully-diluted basis and the promoters of ABFRL will hold about 55.13 per cent upon completion of the issuance.

The fashion & lifestyle company plans to use the capital to strengthen its balance sheet and speed up its growth trajectory. The company also plans to establish new engines of growth by scaling-up its existing businesses, where it has a leading position and increasing presence in emerging high-growth categories like athleisure, casual wear, and ethnic wear.

In addition to this, the company is set to accelerate the execution of its large-scale digital transformation strategy that will further deepen the consumer connect of its brands, expand the reach of its various brands, build strong omnichannel functionalities and enhance its backend capabilities.

Despite the challenging economic condition, ABFRL has successfully accomplished a capital raise of Rs 2,500 crore since April 01, 2020, indicating a cluster of strong brands, a well-established operating model, credible leadership, and attractive business potential.

At 1.44 pm, the share of ABFRL was trading 13.30 per cent higher at Rs 173.80. The stock recorded an intraday high of Rs 169.80 on BSE.