ABFRL board approves raising Rs 2,195 from GIC

By

Isabelle Crossley

Published
May 24, 2022

Aditya Birla Fashion and Retail Limited’s board of directors has given the go ahead to raising Rs 2,195 from Singapore’s sovereign wealth fund GIC. The funds will be raised through a preferential issuance of equity and warrants to an affiliate of GIC. 

First, an investment of Rs 770 crore will be made towards a subscription of equity and warrants which will be carried out in the imminent future, ABFRL announced in a press release on May 24. Then, an investment of Rs 1,425 crore will be made in one or two tranches within 18 months upon the exercise of warrants. Following the entire investment, GIC will own an equity stake of approximately 7.5% of the business.
 
“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 Aditya Birla Group chairman Kumar Mangalam Birla in a press release. “ABFRL has become one of the leading players in this market through its diversified portfolio of strong brands, wide distribution and an established business model and is well positioned to benefit from this opportunity. I am delighted to welcome GIC, a global institutional investor, as a long-term partner in the company’s exciting growth journey. An investment of this nature serves to underscore ABFRL’s strong position and dynamic growth model.”

The business will use the funds to accelerate its growth and to focus on emerging high-growth business models and its digital assets. The transaction is subject to regulatory and other customary approvals.
 
“In the last few years, ABFRL has built a strong presence across all large and attractive segments of the Indian fashion market through organic and inorganic actions,” said ABFRL’s managing director Ashish Dikshit. “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.”
 
“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 GIC’s chief investment officer of private equity Choo Yong Cheen. “ABFRL has a strong track record of building brands and its new business lines, including innerwear and ethnic wear, have strong structural tailwinds. We are confident that the company is well-positioned to continue its transformational journey into a future-ready consumer company powered by the growth of India.”