Aditya Birla Fashion & Retail To Get Rs 2,195 crore From GIC Singapore

Aditya Birla Fashion & Retail Ltd. has approved raising of up to Rs 2,195 crore by way of a preferential issue of equity and warrants to an affiliate of GIC Pte Ltd., Singapore’s sovereign wealth fund.

GIC will first invest Rs 770 crore toward subscription of equity and warrants, followed by up to Rs 1,425 crore in one or more tranches within 18 months upon exercise of warrants, the Indian firm said in an exchange filing on Tuesday. After the transaction, GIC will own about 7.5% equity stake in ABFRL, while Aditya Birla Group will hold 51.9%.

The company plans to issue 1,02,16,450 equity shares at Rs 288.75 a unit and 6,58,00,866 warrants at Rs 288.75 apiece. It also announced an increase in authorised share capital from existing Rs 1,010.15 crore to Rs 2,010.15 crore. The transaction is subject to regulatory and other customary approval.

The Mumbai-based retailer, which owns brands such as Louis Philippe, Van Heusen and Allen Solly, said that it plans to use the capital to accelerate its growth engine built around strength of its current businesses, along with emerging high-growth business models.

This capital infusion would allow the company to aid growth of its retail formats in the fast-growing branded apparel market “and significantly enhance digital play in the coming years to benefit from rapidly evolving consumer habits”, Ashish Dikshit, managing director at ABFRL, was quoted as saying in the filing.

“ABFRL has a strong track record of building brands and its new business lines, including inner wear and ethnic wear, have strong structural tailwinds," said Choo Yong Cheen, chief investment officer (private equity) at GIC. "The company is well-positioned to continue its transformational journey into a future-ready consumer company powered by the growth of India.”

Kumar Mangalam Birla, chairman of Aditya Birla Group, said, “The Indian apparel industry is set 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, he said, has become one of the leading players in this market through its diversified portfolio of strong brands, wide distribution and an established business model and is well positioned to benefit from this opportunity. GIC’s investment underscores ABFRL’s strong position and dynamic growth model.

Reacting to the fundraising announcement, shares of Aditya Birla Fashion gained 0.68% against a 0.38% decline in the benchmark Nifty 50. The stock has fallen 0.88% in the last one month.