On Friday, Aditya Birla Fashion and Retail Limited, or ABFRL, announced that it had scooped 1,500 Crore INR or approximately 203 million USD from Flipkart (1), an Indian ecommerce giant. With the latest investment, the Walmart-owned entity would command 7.8% equity on a fully diluted basis.
The transaction is completed via the preferential issue. After completing the issuance, the promoters of Aditya Birla Fashion and Retail would hold about 55.13%. Notably, the firm would use the fresh capital to enhance its balance sheet and accelerate its growth trajectory.
The company would also put a part of the infusions to scale up its existing businesses aggressively. It includes an area where it is already holding strong and market-leading positions and increasing its presence in emerging high-growth categories. It includes casual wear, ethnic wear, innerwear, athleisure, and establishing them as its new growth engine.
Aditya Birla Aiming to Seize Future Growth Opportunities in India
While commenting on the partnership, the Chairperson of Aditya Birla Group, Kumar Mangalam Birla, stated that they had shaped ABFRL into a robust platform to seize India’s future growth opportunities. And the partnership is an essential part of that strategy.
He further added that Indian fashion retail is a set for robust long-term growth because of its strong fundamentals, favorable demographics, rising disposable incomes, and brand aspiration. The accelerated growth of technology infrastructure would further enhance the process.
The CEO of Flipkart Group, Kalyan Krishnamurthy, stated that via this transaction with ABFRL, the team would work towards the availability of a wide range of products for fashion-conscious consumers across different in the country. We are delighted to work with ABFRL and its comprehensive and well established retail infrastructure as the team is addressing a promising opportunity in the Indian apparel industry.
It is noteworthy that Flipkart has followed the same acquisition strategy for other brands and verticals previously. The brand is looking to grow its operations and leverage strategic collaborations to keep its costs lean and expand rapidly.