Aditya Birla Fashion and Retail (ABFRL) has approved raising Rs 1,500 crore by way of preferential issue to Flipkart Group. The equity capital will be raised at Rs 205 per share.
With this infusion, Flipkart Group will own 7.8 percent equity stake in ABFRL on a fully diluted basis. The promoter and promoter group companies of ABFRL will hold about 55.13 percent upon completion of the issuance.
ABFRL plans to use this capital to strengthen its balance sheet and accelerate its growth trajectory.
The company plans to scale up its existing businesses where it holds strong, market-leading positions while increasing presence in emerging high-growth categories such as innerwear, athleisure, casual wear and ethnic wear, establishing these as new engines of growth for the company.
Moreover, ABFRL will accelerate execution of its large-scale digital transformation strategy, expand reach of its diverse brand portfolio, build omni-channel functionalities and augment its backend capabilities.
Flipkart Group will strengthen the range of brands offered on its e-commerce platforms Flipkart and Myntra, further strengthening its partnership with ABFRL, and enhancing the range of premium international and Indian brands on offer.
On completion of this transaction, ABFRL will have executed a capital raise of Rs 2,500 crore since 1 April 2020.
The transaction is subject to regulatory and other customary approvals.