Aditya Birla Fashion and Retail (ABFRL) on Wednesday said its board had approved raising $500 million (Rs 4,300 crore) through a preferential issue and qualified institutional placement (QIP) of equity shares. The fundraising comes ahead of a proposed vertical demerger of ABFRL by the end of this financial year (FY25).
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The ABFRL board also said that it had approved the convening of an extraordinary general meeting on February 13 to approve the latest fund raise.
The preferential issue of $275 million (Rs 2,365 crore) will be led by the promoter group investing $150 million (Rs 1,290 crore) and Fidelity Investments putting in $125 million (Rs 1,075 crore). The promoter participation is at a premium of 17.5% over Tuesday’s closing price of Rs 270.35 apiece on the BSE.
The QIP, on the other hand, is up to $225 million (Rs 1,935 crore), the company said. ABFRL’s shares closed trade on Wednesday at Rs 265.60 apiece, down 1.76% versus the previous day’s close.
“This combined fund raise will deleverage the company and position it to aggressively pursue its growth strategy through its multiple growth engines established over the last few years,” ABFRL said.
The demerger, which was announced earlier, will see the Madura business along with casual, sports and inner wear hived off into a separate unit. The remaining business including Pantaloons, Style Up, ethnic and designer brands and digital-first brands will continue to sit within ABFRL.
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Almost two-third of ABFRL’s total revenue of Rs 12,418 crore, for the uninitiated, comes from the Madura business. Some of the Fidelity Investment funds that will participate in the preferential issue will include Fidelity Blue Chip Growth Fund, Fidelity Blue Chip Growth K6 Fund and Fidelity Series Blue Chip Growth Fund.
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