Kumar Mangalam Birla’s fashion empire raises ₹2,195 crore from Singapore’s sovereign wealth fund

  • Aditya Birla Fashion and Retail raised ₹2,198 crore from GIC in exchange for a 7.5% stake.
  • GIC will now invest ₹770 crore in subscription and warrants, followed by up to ₹1,425 crore in one or more tranches.
  • The distribution company will use this capital to accelerate the growth of its current business.

Kumar Mangalam Birla owned Aditya Birla Fashion and Retail (ABFRL) today raised ₹2,198 crore from Singapore’s sovereign wealth fund GIC in exchange for a 7.5% stake in the company. The fashion retailer is home to a large number of Indian and international brands like Sabyasachi, Forever21, Ralph Lauren and more.

GIC will now invest ₹770 crore in the subscription and warrants, followed by up to ₹1,425 crore in one or more tranches within 18 months of exercise of the warrants. Aditya Birla Group will hold approximately 51.9% of the company’s capital after this transaction.

“The Indian apparel industry is poised for robust long-term growth owing to strong fundamentals of a large and growing middle class, favorable demographics, rising disposable incomes and aspiration for brands,” said Kumar Mangalam Birla, Chairman of Aditya Birla Group.

The transaction is subject to regulatory and other customary approvals.

A “future-ready” consumer business

GIC believes the organization is poised to grow with a solid plan to capture the next phase of digital growth. “ABFRL has a strong track record in building brands, and its new business lines, including loungewear and ethnic wear, have strong structural tailwinds,” said Choo Yong Cheen, chief investment officer of GIC, calling ABFRL a future-ready consumer business.

The retailer will use this capital to accelerate the growth of its current business and other emerging high-growth business models. “This capital injection 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 and strengthen our position as one major players in the industry,” said Ashish Dikshit, Managing Director of ABFRL.

Aditya Birla Fashion and Retail (ABFRL) is part of the metal-cement conglomerate, the Aditya Birla Group. The company recorded revenue of ₹8,136 crore and has a retail space of 9.2 million square feet. It spans 3,468 exclusive stores, 6,515 department store outlets and 28,585 multi-brand outlets across India.

It is home to some of India’s largest and most iconic brands including Louis Philippe, Van Heusen, Allen Solly and Peter England. The company has also formed strategic partnerships with designers such as ‘Shantanu & Nikhil’, ‘Tarun Tahiliani’ and ‘House of Masaba’.

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