Aditya Birla Fashion to raise Rs 2,195 cr of primary capital from GIC

The board of Aditya Birla Fashion and Retail Limited (ABFRL) in its meeting on Tuesday approved raising of up to Rs 2,195 cr by way of preferential issuance of equity and warrants to an affiliate of GIC, Singapore’s sovereign wealth fund (GIC).

GIC will invest Rs 770 cr now towards subscription of equity and warrants, followed by up to Rs. 1,425 Cr. in one or more tranches within 18 months upon exercise of warrants. Post the entire investment, GIC will own over 7.5% equity stake in ABFRL. Aditya Birla Group will hold over 51.9% stake in the company post the completion of this transaction.

ABFRL plans to use this capital to accelerate its growth engine built around strength of its current businesses along with a rapidly evolving play in emerging high-growth business models.

Kumar Mangalam Birla, Chairman Aditya Birla Group said, “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 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. An investment of this nature serves to underscore ABFRL’s strong position and dynamic growth model”.

Ashish Dikshit, MD of ABFRL said, “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 & fortify our position as one of the leading players in the industry. ”. Choo Yong Cheen, Chief Investment Officer of Private Equity, GIC said, “ABFRL has a strong track record of building brands and its new business lines, including innerwear, have strong structural tailwinds.”

GIC will invest Rs 770 cr now towards subscription of equity and warrants