On May 24, the board of directors of Aditya Birla Fashion and Retail Limited (ABFRL) approved a preferential offering of shares and warrants to a subsidiary of GIC, Singapore’s sovereign wealth fund, to raise up to Rs 2,195 crore (GIC).
Subject to shareholder approval, the board also decided to enhance the authorised share capital from Rs 1,010.15 crore to Rs 2,010.15 crore.
GIC would invest Rs 770 crore now for equity and warrant subscriptions, followed by up to Rs 1,425 crore in one or more tranches within 18 months following warrant exercise, according to ABFRL’s regulatory filing.
GIC will possess roughly 7.5 percent of ABFRL’s equity after the investment is completed. Following the completion of this transaction, the Aditya Birla Group will own about 51.9 percent of the company.
“The Indian apparel industry is primed for sustained long-term growth due to strong fundamentals of a big and increasing middle class, favourable demographics, rising disposable incomes, and aspiration for brands,” stated Kumar Mangalam Birla, Chairman Aditya Birla Group. ABFRL has established itself as a market leader thanks to its diverse portfolio of strong brands, broad distribution, and well-established business model, and is well positioned to capitalise on this opportunity. I’m thrilled to welcome GIC, a worldwide institutional investor, as a long-term partner in the company’s ambitious expansion. This type of investment demonstrates ABFRL’s strong position and dynamic growth model.”
ABFRL intends to use the funds to fuel its growth engine, which is predicated on the strength of its existing businesses as well as a rapidly growing play in emerging high-growth business models.
“In the last several years, ABFRL has created a strong presence across all big and appealing areas of the Indian fashion market through organic and inorganic operations,” stated Ashish Dikshit, MD of ABFRL. “With this infusion of money, we will be able to accelerate the growth of this platform of strong brands and well-established retail formats in the fast-growing branded apparel sector and solidify our position as one of the industry’s top companies.”
“ABFRL has a proven track record of establishing brands, and its new business lines, such as innerwear and ethnic wear, benefit from strong structural tailwinds.” GIC’s Chief Investment Officer of Private Equity, Choo Yong Cheen, stated, “We are convinced that the company is well-positioned to continue its transformational journey into a future-ready consumer company fueled by India’s growth.”
At 10:26 a.m., ABFRL shares were down 0.59 percent on the BSE, trading at Rs 271.45 apiece, while the benchmark Sensex was down 211.47 points, or 0.39 percent, at 54,091.53.