Aditya Birla Fashion raising Rs. 2,195 Cr. of primary capital from GIC

The board of Aditya Birla Fashion and Retail Limited (“ABFRL”) in its meeting today 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 ~ 7.5% equity stake in ABFRL. Aditya Birla Group will hold ~ 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.

Mr. 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 & an established business model and is well positioned to benefit from this opportunity. I am delighted to welcome GIC, a global institutional investor, as a long-term partner in the company’s exciting growth journey. An investment of this nature serves to underscore ABFRL’s strong position and dynamic growth model”.

Commenting on the investment, Mr. Ashish Dikshit, MD of ABFRL said, “In the last few years, ABFRL has built a strong presence across all large and attractive segments of the Indian fashion market through organic & inorganic actions. 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. We look forward to benefit from GIC’s extensive experience of investing in businesses globally and its long-term orientation as we plan to expand our presence and significantly enhance our digital play in the coming years to benefit from rapidly evolving consumer habits”.

Mr. Choo Yong Cheen, Chief Investment Officer of Private Equity for GIC said, “We are delighted to partner with Aditya Birla Fashion and Retail to bring our long-term capital and resources to support its next phase of growth. ABFRL has a strong track record of building brands and its new business lines, including innerwear and ethnic wear, have strong structural tailwinds. 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”.

Mr. Pankaj Sood, Head of Direct Investments, India and Africa, GIC said “Branded apparel is a large and attractive market, and we believe that ABFRL is well-positioned with its best-in-class management team, strong portfolio of brands, and robust plan for capturing the next phase of digital-led growth. We continue to be excited about the long-term outlook of India and are keen to participate in ABFRL’s sustained structural growth driven by improving demographics.”

The transaction is subject to regulatory and other customary approvals.

About Aditya Birla Fashion and Retail Limited

ABFRL is part of a leading Indian conglomerate, The Aditya Birla Group. With revenue of Rs. 8,136 Cr. spanning retail space of 9.2 million sq. ft. (as on March 31, 2022), it is one of India’s leading pure-play fashion powerhouse with an elegant bouquet of leading fashion brands and retail formats.

The Company has a network of 3,468 exclusive stores, 6,515 points of sale in department stores and 28,585 multi-brand outlets across India (as on 31st March 2022).

It houses some of the largest and most iconic brands in India including Louis Philippe, Van Heusen, Allen Solly and Peter England, established over 25 years. Pantaloons is amongst India’s eminent fashion retailers. Company has also built a strong position in innerwear and athleisure segments under Van Heusen brand.

Company’s international brands portfolio includes The Collective, one of the largest multi-brand retailers of international brands in India and exclusive partnerships with Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever 21, American Eagle and Reebok.

The Company’s foray into branded ethnic wear business includes brands such as Jaypore, Tasva & Marigold Lane. The Company has strategic partnerships with Designers ‘Shantanu & Nikhil’, ‘Tarun Tahiliani’, ‘Sabyasachi’ and ‘House of Masaba’. ABFRL is also embarking on a significant Direct-to-Consumer play to build a portfolio of new-age brands across fashion, beauty and other lifestyle segments.

The Company is bolstering its digital capabilities by scaling up its brands.com to build an integrated portfolio of digital assets to provide an immersive customer experience, deepen consumer connect of its brands and expand its portfolio into emerging consumer segments.