GIC, Singapore’s sovereign wealth fund, will invest up to Rs 2,195 crore in Aditya Birla Fashion and Retail Ltd. (ABFRL) in exchange for a 7.5 percent stake in the Mumbai-based retailer. ABFRL’s board approved the capital raise by issuing preferential equity shares and warrants, it said in a release on Tuesday.
After regulatory approvals, GIC will initially invest Rs 770 crore for a subscription of equity and warrants. It will invest the remaining Rs 1,425 crore in the next 18 months in one or more tranches.
The capital from GIC will help ABFRL in its next phase of growth. Part of the Indian conglomerate The Aditya Birla Group, ABFRL owns fashion brands including Louis Philippe, Van Heusen, Allen Solly, and Peter England.
“ABFRL has a strong track record of building brands and its new business lines, including innerwear and ethnic wear, have strong structural tailwinds,” said Choo Yong Cheen, Chief Investment Officer of Private Equity for GIC.
“We are confident that the company is well-positioned to continue its transformational journey into a future-ready consumer company powered by the growth of India,” he added.
Aditya Birla Group will own a 51.9 percent stake in the company after the transaction is completed.
This deal follows the Rs 1,500 crore investment by Flipkart Investments Private Ltd (FIPL), a subsidiary of the Walmart-owned Flipkart Private Ltd., in ABFRL which the Competition Commission of India approved last year. FIPL owns a 7.8 percent stake in the Rs 8,136-crore retail company.
“This capital infusion will allow us to accelerate the growth of this platform of strong brands and well-established retail formats in the fast-growing branded apparel market and fortify our position
as one of the leading players in the industry,” said Ashish Dikshit, Managing Director of ABFRL.
ABRL has a network of 3,468 exclusive stores, 6,515 points of sale in department stores, and 28,585 multi-brand outlets across India.
It has partnered with Designers Shantanu & Nikhil, Tarun Tahiliani, Sabyasachi, and House of Masaba while upping its Direct-to-Consumer play and improving its customer experience, deepening the consumer connection of its brands and expanding its portfolio into emerging consumer segments.
