Aditya Birla Fashion and Retail is going to sell its 8 per cent stake to Walmart-owned e-commerce company Flipkart.
The country's leading fashion apparel company Aditya Birla Fashion and Retail is going to sell close to 8 percent of its stake to Walmart-owned e-commerce company Flipkart. This deal will be in total 1500 crores.
Preference Share will buy Flipkart
Aditya Birla Retail has said in a statement that the company has approved raising Rs 1,500 crore by issuing preferential shares to Flipkart Group. Under this, equity capital will be raised at the rate of Rs 205 per share. ”ABFRL told the stock market that along with this investment, the Flipkart group will get 7.8 percent stake on full paid basis. "After the completion of the issue, the promoters and promoter group of ABFRL will have a 55.13 per cent stake," the company said.
Fashion industry will reach $ 100 billion
Kumar Mangalam Birla, president of Aditya Birla Group, said that this partnership reflects strong confidence in the future of the apparel industry in India, which is expected to reach US $ 100 billion in the next five years. Aditya Birla said that he will use the funds received from this deal to strengthen his balance sheet and increase growth. In addition, Emerging wants to expand its business in high-growth categories such as innerwear, casual wear and ethnic wear.
The company said that despite the challenges of Coronavirus infection, if the deal with Flipkart is completed, Aditya Birla Fashion will raise Rs 2500 crore from April 1, 2020. Kalyan Krishnamurthy, CEO of Flipkart Group said that this deal will benefit us from the products range of Aditya Birla Fashion Retail Limited (ABFRL).