Big Win for ABFRL: NCLT Gives Green Light to TCNS Clothing Merger – What It Means for Investors

Aditya Birla Fashion and Retail Ltd (ABFRL) has announced that the National Company Law Tribunal (NCLT) has approved its merger with TCNS Clothing. The merger, called the Scheme of Amalgamation (Merger by Absorption), involves both ABFRL and TCNS Clothing, along with their shareholders and creditors. The NCLT Mumbai Bench passed the approval order on August 2, 2024.

In a regulatory filing on August 16, ABFRL confirmed that it had received the official certified copy of the NCLT’s order.

ABFRL, part of the Aditya Birla Group, operates in the apparel, footwear, and accessories retail sector. TCNS Clothing is known for its popular women’s clothing brands like W and Aurelia.

In May 2023, ABFRL announced that it would acquire a majority stake in TCNS Clothing in a deal valued at ₹1,650 crore. By September 2023, ABFRL completed the purchase of a 51% stake in TCNS Clothing, becoming the official promoter of the company.

Earlier, the Competition Commission of India (CCI) approved this acquisition in June 2023. By March 2024, the merger plan also received no-objection letters from both BSE and the National Stock Exchange of India (NSE).

ABFRL’s Q1 Financial Results

For the quarter ending June 30, 2024, ABFRL reported a consolidated net loss of ₹161 crore, which increased from a ₹141 crore loss in the same period last year. However, the loss had decreased compared to the ₹229 crore reported in the March quarter.

ABFRL’s revenue grew by 7% to ₹3,428 crore in Q1FY25, compared to ₹3,196 crore from the previous year.

The company explained that the increased net loss was due to continued investments in digital-first fashion brands under the TMRW portfolio and losses from its premium ethnic wear brands, including TCNS Clothing.

As of 1:00 PM on the day of the announcement, ABFRL shares were trading slightly higher at ₹319.70 per share, while TCNS Clothing shares were up 0.89% at ₹569.75 on the BSE.