Aditya Birla Fashion & Retail (ABFRL) witnessed a remarkable 15% surge in its share price during intraday trading on April 2, following the announcement that the company’s board had authorized the management to explore the vertical demerger of its Madura Fashion & Lifestyle business into a separate listed entity.
As of 09:55 am, Aditya Birla Fashion & Retail was quoting at Rs 237.70 on the Bombay Stock Exchange (BSE), reflecting a gain of Rs 26.00 or 12.28%.
The stock reached an intraday high of Rs 243.45 and an intraday low of Rs 229.70.
Trading data reported by CNBC-TV18 revealed that approximately 1.34 crore shares of Aditya Birla Fashion & Retail, accounting for 1.41% of the equity, were traded, with a total value of Rs 322.5 crore. The average price per share stood at Rs 243.
The proposed demerger aims to establish two separate listed companies, each operating as independent growth engines with distinct capital structures and parallel opportunities for value creation. This strategic move is expected to unlock significant value for shareholders and drive sustained growth for both entities.
The market responded positively to the news, reflecting investor optimism about the potential benefits and opportunities associated with the proposed demerger.
“Upon receiving the requisite approvals, the demerger process will proceed through an NCLT scheme of arrangement, ensuring equitable shareholding for all ABFRL shareholders in the newly formed entity,” the company clarified.
Following the demerger, ABFRL’s strategic focus will shift towards high-growth segments driven by evolving consumer preferences. These segments include the transition from unbranded to branded products, premiumization trends, the emergence of super premium and luxury categories, and the rapid growth of digital-first brands targeting Gen Z consumers.
Once the demerger is finalized, ABFRL plans to bolster its financial position by raising growth capital within 12 months. This initiative will strengthen its balance sheet and position the company to seize the abundant growth opportunities ahead.
Post-demerger, ABFRL’s diversified portfolio will encompass:
- Value Retail: Catering to value and masstige fashion retail markets through leading brands such as Pantaloons and Style Up.
- Ethnic Portfolio: Offering an extensive range of ethnic wear spanning various occasions, price points, and consumer segments, including designer collections.
- Luxury Segment: Housing a rapidly growing bridge to luxury segment and luxury platform featuring prestigious brands like The Collective, Galleries Lafayette, and select luxury labels.
- Digital Brands: Showcasing TMRW, a prominent collection of digital-first fashion brands tailored to modern consumer preferences and digital market dynamics.
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