Aditya Birla Group Company Announces Fundraising via Promoter and QIP Ahead of Major Business Spinoff
Promoter participation at a 17.5 per cent premium over the previous day's closing price reflects strong confidence in the company's growth potential.
Aditya Birla Fashion and Retail Limited (ABFRL) has announced a significant fundraising of USD 500 million through a combination of a preferential issue and a Qualified Institutional Placement (QIP) of equity shares.
The company will raise USD 275 million through a preferential issue, with USD 150 million coming from the promoter group and USD 125 million from Fidelity Investments.
Fidelity Investments will participate through its various funds, including Fidelity Blue Chip Growth Fund, Fidelity Blue Chip Growth Commingled Pool, Fidelity Blue Chip Growth K6 Fund, Fidelity Series Blue Chip Growth Fund, and FIAM Target Date Blue Chip Growth Commingled Pool.
The promoter's participation at a 17.5 per cent premium over the previous day's closing price highlights their confidence in the company's growth prospects. Additionally, this fundraising will increase the promoter's stake in ABFRL.
An additional USD 225 million will be raised through a QIP, bringing the total fundraising to USD 500 million. Both the preferential issue and QIP are subject to customary and regulatory approvals. The shareholder meeting to approve the preferential issue is scheduled for February 13, 2025, with the pricing date set for January 14, 2025.
The funds will be used to reduce debt and support the company’s growth strategy, which includes multiple growth engines developed in recent years. This capital infusion is a key step before the proposed vertical demerger, which will split the company into two separately listed entities by the end of the current financial year.
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The fundraising comes ahead of ABFRL's plan to spin off its major business unit, Madura Fashion and Lifestyle, into a separate listed entity, a move expected to strengthen ABFRL’s financial position.
Madura Fashion, which houses brands like Peter England, Louis Philippe, and Van Heusen, accounts for roughly 70 per cent of ABFRL's revenue.
Aditya Birla Fashion and Retail Limited (ABFRL), part of the Aditya Birla Group, is India’s first billion-dollar pure-play fashion powerhouse. The company boasts an extensive network of 4,538 stores across 37,952 multi-brand outlets and 9,047 points of sale in department stores across India (as of September 30, 2024). Its portfolio includes India’s most prominent fashion brands such as Louis Philippe, Van Heusen, Allen Solly, and Peter England, which have been established over 25 years. Additionally, Pantaloons is one of India’s leading fashion retailers, while Style Up is an emerging value retail format.
ABFRL share price was closed down 1.76 per cent at Rs 266 on Wednesday, January 15, 2025.