GIC arm to invest ₹2,195 crore in Aditya Birla Fashion & Retail

The board of Aditya Birla Fashion and Retail Limited (ABFRL) on Tuesday approved raising of up to ₹2,195 crore by way of preferential issuance of equity and warrants to an affiliate of GIC, Singapore’s sovereign wealth fund (GIC)

GIC will invest ₹770 crore now towards subscription of equity and warrants, followed by up to ₹1,425 crore in one or more tranches within 18 months upon exercise of warrants, ABFRL said in a statement.

After the entire investment is made, GIC will own 7.5% equity stake in ABFRL.

Aditya Birla Group will hold 51.9% stake in the company post the completion of this transaction.

ABFRL said it would use this capital to accelerate growth.

Kumar Mangalam Birla, Chairman Aditya Birla Group, said, “An investment of this nature serves to underscore ABFRL’s strong position and dynamic growth model”.

Ashish Dikshit, MD of ABFRL, said, “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 look forward to benefit from GIC’s extensive experience of investing in businesses globally and its long-term orientation..” he added.

Choo Yong Cheen, Chief Investment Officer of Private Equity for GIC, said, “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”.

The transaction is subject to regulatory and other customary approvals.