GIC Singapore to invest Rs 2,195 cr in Aditya Birla Fashion and Retail

Post investment, GIC Singapore will own approximately 7.5% equity stake in Aditya Birla Fashion and Retail

The board of Aditya Birla Fashion and Retail (ABFRL) on Tuesday approved raising up to Rs 2,195 crore by way of preferential issuance of equity and warrants to an affiliate of GIC, Singapore’s sovereign wealth fund (GIC), the company said in a statement.

GIC will first invest Rs 770 crore towards subscription of equity and warrants, followed by up to Rs 1,425 crore in one or more tranches within 18 months upon exercise of warrants.

Post investment, GIC will own approximately 7.5 per cent equity stake in ABFRL, while Aditya Birla Group will hold 51.9 per cent stake.

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

The transaction is subject to regulatory and other customary approvals.

Kumar Mangalam Birla, chairman of 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."

Birla said 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," he added.

Ashish Dikshit, MD of ABFRL also said in the release that in the last few years, the company has built a strong presence across all large and attractive segments of the Indian fashion market through organic & 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 & 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,” Dikshit said. 

Choo Yong Cheen, chief investment officer of private equity at GIC said, "the company is delighted to partner with Aditya Birla Fashion and Retail to bring its 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,” Cheen said.