GIC will invest Rs 770 crore now towards subscription of equity and warrants, followed by up to Rs 1,425 crore in one or more tranches within 18 months upon exercise of warrants. After this entire investment, GIC will own about 7.5 per cent equity stake in ABFRL, and Aditya Birla Group will hold about 51.9 per cent stake in the company.
ABFRL said it plans to use this capital to accelerate its growth engine built around the 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.”
Commenting on the investment, 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.”
As per the release, the transaction is subject to regulatory and other customary approvals.
“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,” said Choo Yong Cheen, chief investment officer of Private Equity for GIC.
The company’s total income stood at Rs 8,236 crore in the fiscal year ending March 31, 2022 as compared to Rs 5,322 crore in the same period of previous fiscal year ended March 31, 2021.
ABFRL houses brands including Louis Philippe, Van Heusen, Allen Solly and Peter England. The company’s international brands portfolio includes The Collective and it also has partnerships with Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever 21, American Eagle and Reebok.
The company also said it plans to bolster its digital capabilities by scaling up its brands.com to build an integrated portfolio of digital assets to provide enhanced customer experience.