The shares of the leading fashion and lifestyle firm rose 17 percent to an intraday high of ₹247.40 per share after its board considered demerging Madura Fashion & Lifestyle into a separately listed company within the group.
At 11:30 a.m., on Tuesday’s trade, Aditya Birla Fashion & Retail Ltd. shares gained 12.23 percent to ₹237.60 per share on the national stock exchange. The company has a market capitalization of ₹22,552 crore.
As per the company’s exchange filing, the Board of Directors of Aditya Birla Fashion and Retail Ltd. (ABFRL) has approved the demerger of the Madura Fashion & Lifestyle business from ABFRL, to form a separately listed company.
The proposed demerger aims to establish two independent listed entities, each with its own capital structures and avenues for value creation.
The Madura Fashion & Lifestyle business segment (MFL), encompasses renowned lifestyle brands such as Louis Philippe, Van Heusen, Allen Solly, and Peter England, alongside casual wear brands like American Eagle and Forever 21, sportswear brand Reebok, and the innerwear division under Van Heusen, will transition into a separate listed entity.
Upon obtaining the necessary approvals, the demerger will be executed through an NCLT scheme of arrangement, ensuring that all ABFRL shareholders possess identical shareholding in the newly formed entity.
The company has seen a consistent annual increase in revenue, with a 16 percent rise from ₹3,589 crore in Q3FY23 to ₹4,167 crore in Q3FY24. However, during this same period, the net profit has undergone a decline, shifting from a profit of ₹11 crore to a loss of ₹108 crore.
Aditya Birla Fashion & Retail Ltd, as of March 31, 2023, possesses a retail space spanning 10.8 million sq. ft. It stands as India’s premier billion-dollar pure-play fashion entity, boasting a distinguished collection of leading fashion brands and retail formats.
The company’s extensive network encompasses 4,753 stores, dispersed across approximately 37,106 multi-brand outlets, alongside 9,781 point of sales within department stores across India, as of December 31, 2023.
The company hosts a portfolio featuring some of India’s largest brands, including Louis Philippe, Van Heusen, Allen Solly, and Peter England. Pantaloons stands out as one of India’s foremost fashion retailers.
Aditya Birla Fashion holds long-term branding partnerships with renowned brands including Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever 21, American Eagle, Simon Carter, Reebok, and Galeries Lafayette.
Aditya Birla Fashion shares have seen a 9 percent increase over the past six months and an 11 percent increase over the past year.
Written by Omkar Chitnis
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