Aditya Birla Fashion and Retail (ABFRL) is set to raise up to Rs 2,195 crore from Singapore’s sovereign wealth fund GIC. GIC will first invest Rs. 770 crore 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 the entire investment, GIC will own a 7.5% equity stake in ABFRL, while Aditya Birla Group will hold 51.9%. Walmart’s Flipkart, too, holds 7.8% in ABFRL through its Rs 1,500-crore in- vestment made last year.
“I am delighted to welcome GIC, a global institutional investor, as a long-term partner. An investment of this nature serves to underscore ABFRL’s strong position and dynamic growth model,” said Kumar Mangalam Birla, chairman at Aditya Birla Group.
ABFRL, which has been on a shopping spree of indigenous designer brands, plans to use this capital to accelerate its growth engine built around the strength of Rs 8,136 crore in FY22. its current businesses along with a rapidly evolving play in emerging high-growth business models.
ABFRL, which sells several apparel brands in India, including Louis including Philippe, Van Heusen and Allen Solly has acquired stakes in brands of Indian design houses such as Jaypore, Shanta nu and Nikhil, Tarun Tahili ani and Sabyasachi.
In December, it marked its entry into the sportswear category by taking over Reebok in India and other Asean markets through a long-term licensing agreement with Authentic Brands Group (ABG). In the following month, it bought 51% in House of Masaba Lifestyle for around Rs 90 crore to bolster its portfolio of fashion labels. ABFRL clocked revenues of Rs 8.136 crore in FY22.
“ABFRL has a strong track record of building brands and its new business lines, including innerwear and ethnic wear, have strong structural tailwinds,” said Choo Yong Cheen, a chief investment officer of private equity for GIC.