Fashion and apparel behemoth Aditya Birla Fashion and Retail Ltd plans to raise $500 million (about Rs 4,300 crore) though preference shares and qualified institutional placement ahead of the proposed demerger of its key revenue platform.
The board of Aditya Birla Fashion and Retail Ltd on Wednesday approved raising capital though a $275 million-preference share issue and a $225-million-QIP, according to an exchange release. The shareholder’s meeting for approving the preferential issuance is scheduled for Feb 13.
From the total preference share issuance, promoters will infuse $150 million, while Fidelity Investments will put in $125 million through its funds.
The promoter preference share participation is at a premium of 17.5% over Tuesday’s closing price, the release said. Shares of Aditya Birla Fashion ended at 270.35 rupees on the Bombay Stock Exchange on Tuesday.
“This combined fund raise will deleverage the company and position it to aggressively pursue its growth strategy through its multiple growth engines established over the last few years,” the company said.
ABFRL plans to spin off Madura Fashion & Lifestyle into a separate publicly-listed company called Aditya Birla Lifestyle Brands Ltd, almost 25 years after it had acquired the company.
The demerger exercise is expected to be completed by the end of this financial year, the company said.
Madura and Pantaloons contribute around 88% of the topline of ABFRL. Company officials have hinted in the past that it could grow better as an independent entity.
In 2023-24, the company’s consolidated revenue grew 12.7% to Rs 13,995.86 crore. However, high expenditure led to a net loss of Rs 738.01 crore, bringing the bottomline down to levels last seen in the aftermath of the COVID-19 pandemic in 2020-21.
Aditya Birla Fashion has four main divisions. The designer labels come under the ‘Ethnic Business’ division, that includes haute couture designers Sabyasachi, ‘S&N’ by Shantnu & Nikhil, Tarun Tahiliani’s Tasva, House of Masaba.
Madura Fashion & Lifestyle houses international brands such as Louis Philippe, Van Heusen, Allen Solly, Peter England, Reebok, Forever 21, Simon Carter, and American Eagle.
Pantaloons Fashion and Retail, acquired in 2012 from Kishore Biyani’s Future Group, is Aditya Birla Fashion’s accessible apparel retail chain with more than 400 stores in India.
Lastly, its ‘Emerging Brands’ division with a portfolio of international brands under ‘The Collective’, such as Ralph Lauren, Hackett London, Ted Baker, and Fred Perry, in addition to its direct-to-consumer digital brand ‘Tmrw’.
As on September 2024, the fashion conglomerate had a network of 4,538 stores across 37,952 multi-brand outlets with 9,047 points of sales in department stores.