Aditya Birla Fashion and Retail Limited ABFRL stated on Tuesday that the board has approved the raising of up to Rs 2,195 crore from Singapore's sovereign wealth fund, GIC, by way of preferential issuance of equity and warrants.
GIC will invest around 770 crore in subscription of equity and warrants, and pump in Rs 1,425 crore in one or more tranches within 18 months. After the investment, GIC will hold a 7.5 per cent equity stake in ABFRL, while Aditya Birla Group will hold 51.9 per cent of the company.
The transaction is subject to regulatory approvals and other customary approvals.
This capital will be used by ABFRL to accelerate growth and build around its business, along with a rapidly evolving play in emerging high-growth business models.
Aditya Birla Group Chairman Kumar Mangalam Birla said that Indian Apparel industry is poised for robust long-term growth due to strong fundamentals of a large and growing middle class, favourable demographics, rising disposable incomes and aspiration for brands. ABFRL has become one of the leading players in the market through its diversified portfolio of strong brands, wide distribution and established business model and is well positioned to benefit from this opportunity, further adding that an investment of this nature serves to underscore ABFRL's position and growth model.
Ashish Dikshit, MD of ABFRL, said that capital infusion will allow them to grow the platform of strong brands and well-established retail formats and strengthen their position as one of the leading players in the industry.
ABFRL has a strong track record of building brands and its new business lines, including innerwear and ethnic wear, which have strong structural tailwinds, according to the Chief Investment Officer for GIC, Choo Yong Cheen. As of March 31, the company is well positioned to continue its transformational journey into a future-ready consumer company powered by the growth of India. ABFRL has a network of 3,468 exclusive stores, 6,515 points of sale in department stores and 28,585 multi-brand outlets across India.
Aditya Birla's biggest greenfield expansion project has 5 billion bn in its biggest greenfield expansion project.