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GIC to invest up to Rs 2,195 cr in Aditya Birla’s fashion arm for 7.5% stake
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Fashion retailer Aditya Birla Fashion and Retail Ltd. (ABFRL) on Tuesday said its board has approved raising up to Rs 2,195 crore from an affiliate of GIC, Singapore’s sovereign wealth fund. 

GIC will invest Rs 770 crore towards subscription of equity and warrants, followed by up to Rs 1,425 crore in one or more tranches over the next 18 months. Post the entire investment, GIC will own 7.5% equity stake in ABFRL.  

Post the transaction, the Aditya Birla Group will hold 51.9% stake in the company, it informed the exchanges. 

ABFRL that operates brands such as Van Heusen, Allen Solly and Peter England in India plans to use the proceeds to accelerate its businesses, while focusing on emerging high-growth business models. 

“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," said Kumar Mangalam Birla, chairman, Aditya Birla Group. 

An investment of this nature serves to underscore ABFRL’s strong position and dynamic growth model, Birla said. 

ABFRL has built a presence across segments of the Indian fashion market through organic and inorganic actions. “This capital infusion will allow the company to accelerate the growth of this platform of strong brands and well-established retail formats in the fast-growing branded apparel market and fortify our position as one of the leading players in the industry,” Ashish Dikshit, managing director, ABFRL. 

GIC’s 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, Dikshit added. 

GIC's chief investment officer of private equity, Choo Yong Cheen, said the investment will help bring the fund's long-term capital and resources to support ABFRL's next phase of growth. 

ABFRL has been widening its portfolio of brands both through acquiring licences for international brands in India as well investing in homegrown ethic wear labels. This has helped the retailer move beyond the formal men's clothing segment. 

In January this year, it acquired a 51% stake in House of Masaba Lifestyle Private Limited. Last year, it had signed a long-term licensing agreement to exclusively sell Reebok products in India and other ASEAN countries. In 2021, it acquired a 51% stake in luxury designer label Sabyasachi, this is besides its investment in Tarun Tahiliani. In 2019, ABFRL acquired omni-channel ethnic wear retailer Jaypore for Rs 110 crore. 

Then earlier this year, the company said it will set up an entity to incubate and acquire new-age, digital brands across fashion, beauty and other lifestyle segments.

ABFRL competes with Arvind Fashions Ltd as well as Reliance Retail and fast fashion retailers such as H&M and Zara. For the quarter ended 31 March 2022, ABFRL reported revenues of Rs 2,283 crore with a profit of Rs 32 crore. It had reported a loss of Rs 196 crore in the year-ago period. The company had a net debt of Rs 504 crore for the three months ended 31 March 2022. 

As of 31st March 2022, ABFRL had a network of 3,468 stores across approximately 28,585 multi-brand outlets with 6,515 points of sales in department stores across India. Its portfolio includes brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England, as well as retail formats such as Pantaloons and The Collective. The company has long-term exclusive partnerships with brands such as Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever21, American Eagle and Reebok. 

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