New Delhi: Fashion Retailer Aditya Birla Fashion & Retail Limited, (ABFRL) said on Tuesday that its board has approved the extension of 2,195 crore from an affiliate of Singapore’s sovereign wealth fund GIC.
GIC will invest 770 crores now for subscription of equity and warrants, thereafter 1,425 crore in one or more installments within 18 months. After the entire investment, GIC will have 7.5% equity stake in ABFRL.
Aditya Birla Group will hold 51.9% stake in the company after the completion of this transaction, the company informed the exchanges.
ABFRL which operates brands such as Van Heusen, Allen Solly and Peter England in India plans to use the capital to accelerate its existing businesses while focusing on emerging high-growth business models .
Kumar Mangalam Birla, Chairman, Aditya Birla Group said, “The Indian apparel industry is poised for strong long-term growth due to strong infrastructure, favorable demographics, rising disposable income and aspirational brands of a large and growing middle class.”
Birla said such investments underscore ABFRL’s strong position and dynamic growth model.
ABFRL has established its presence in all segments of the Indian fashion market through organic and inorganic activities. Ashish Dixit said, “This capital investment will enable the company to accelerate the growth of this platform of strong brands and well-established retail formats in the rapidly growing branded apparel market and strengthen our position as one of the leading players in the industry. will allow.” MD, ABFRL.
Dixit said GIC’s experience of investing in businesses globally and as its long-term orientation, we look to enhance our digital game to expand our presence and benefit from rapidly evolving consumer habits in the years to come. are planning.
Chu Yong Chen, GIC’s chief investment officer for private equity, said the investment will help bring in the fund’s long-term capital and resources to support ABFRL’s next phase of growth.
ABFRL is expanding its portfolio of brands by investing in domestic ethnic wear labels as well as acquiring licenses for international brands in India. This has helped the retailer to move beyond the formal men’s clothing segment.
In January this year, it acquired 51% stake in House of Masaba Lifestyle Pvt Ltd. Last year, it signed a long-term licensing agreement to exclusively sell Reebok products in India and other ASEAN countries. In 2021, it acquired a 51% stake in luxury designer label Sabyasachi, in addition to its investment in Tarun Tahiliani. In 2019, ABFRL acquired omni-channel ethnic wear retailer Jaypore 110 crores.
Then earlier this year, the company said it would set up an entity to incubate and acquire new-age, digital brands in the fashion, beauty and other lifestyle sectors.
ABFRL competes with Arvind Fashion Limited as well as Reliance Retail and fast fashion retailers like H&M and Zara. For the quarter ended March 31, 2022, ABFRL reported revenue of 2,283 crore with a profit of 32 crores. It had reported the loss of 196 crore in a year ago period. The net debt of the company was 504 crore for the three months ended 31 March 2022.
As of 31 March 2022, ABFRL had a network of 3,468 stores in approximately 28,585 multi-brand outlets with 6,515 points of sale in department stores across India. Its portfolio includes brands such as Louis Philippe, Van Heusen, Alan Solly and Peter England, as well as retail formats such as Pantaloons and The Collective. The company has long-standing exclusive partnerships with brands such as Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever 21, American Eagle and Reebok.