Shares of Aditya Birla Fashion And Retail rose as much as 6.58 per cent.
Shares of Aditya Birla Fashion And Retail rose as much as 6.58 per cent to hit an intraday high of Rs 163.50 on the BSE after the company informed exchanges that Walmart Inc’s Flipkart will buy a 7.8 per cent stake in the company for Rs 1,500 crore. Flipkart will buy 7.32 crore equity shares at Rs 205 per share aggregating to Rs 1,500 crore, Aditya Birla Fashion and Retail said in a stock exchange filing.
The investment comes at a time when Amazon.com Inc, billionaire Mukesh Ambani-led Reliance Industries and Flipkart are in a race to gain market share in the country’s fast-growing online market for food and groceries.
“Fashion retail in India is set for robust long-term growth due to strong fundamentals of a large and growing middle class, favorable demographics, rising disposable incomes and aspiration for brands. Rapid growth of technology infrastructure will further accelerate this process,” Kumar Mangalam Birla, Chairman Aditya Birla Group said in a statement.
“Over the years, we have shaped ABFRL into a strong platform to capture future growth opportunities in India. This partnership is a critical component of that strategy,” Mr Birla added.
The company will use the proceeds to strengthen its balance sheet and accelerate its growth trajectory.
“The company plans to aggressively scale-up its existing businesses where it holds strong, market leading positions while increasing presence in emerging high-growth categories such as innerwear, athleisure, casualwear and ethnic wear, establishing these as the new engines of growth for the company,” the Mumbai-based company said in a statement.
Aditya Birla Fashion manufactures popular clothing brands like Allen Solly, Peter England, Louis Philippe and VanHeusen. The company also operates fashion retail chain Pantaloons across the country.
As of 12:02 pm, Aditya Birla Fashion and Retail shares traded 5.67 per cent higher at Rs 162, outperforming the Sensex which was up 0.26 per cent.