India's ABFRL raises ₹2,195 cr from GIC against 7.5% equity stake

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 press release.

ABFRL plans to use this capital to accelerate its growth engine built around strength of its current businesses along with a rapidly evolving play in emerging high-growth business models.

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

Ashish Dikshit, MD of ABFRL, said, “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. 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 and 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 as we plan to expand our presence and significantly enhance our digital play in the coming years to benefit from rapidly evolving consumer habits.”

Choo Yong Cheen, chief investment officer of private equity for GIC, said, “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. 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.”

Pankaj Sood, head of direct investments, India and Africa, GIC, said “Branded apparel is a large and attractive market, and we believe that ABFRL is well-positioned with its best-in-class management team, strong portfolio of brands, and robust plan for capturing the next phase of digital-led growth. We continue to be excited about the long-term outlook of India and are keen to participate in ABFRL’s sustained structural growth driven by improving demographics.”

The transaction is subject to regulatory and other customary approvals.

Fibre2Fashion News Desk (KD)