Shares of Aditya Birla Fashion and Retail Ltd. hit a 15% upper circuit on Tuesday after it announced plans to vertically demerge its Madura Fashion and Lifestyle business into a separate listed company.
Shareholders of Aditya Birla Fashion will have identical ownership in the new entity, the exchange filing said.
Madura Fashion's portfolio consists of popular lifestyle brands like Van Heusen, Allen Solley, Louis Philippe, and casual wear brands American Eagle and Forever 21. It also operates the sportswear brand Reebok.
The innerwear business under Van Heusen will be listed into another separate listed entity, the exchange filing said.
On the BSE, Aditya Birla Fashion's stock surged as much as 15% during the day to Rs 243.45 apiece, the highest since Feb. 2. It was trading 11.71% higher at Rs 236.50 per share, compared to a 0.07% decline in the benchmark Sensex as of 9:47 a.m.
The share price has risen 9.67% in the last 12 months. The total traded volume so far in the day stood at 51 times its 30-day average. The relative strength index was at 65.01.
Out of 24 analysts tracking the company, five have a 'buy' rating on the stock, nine recommend 'hold' and 10 suggest 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 0.7%.
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