Flipkart To Buy 8% Stake In India's Aditya Birla Fashion And Retail For Rs. 1500 Cr

(img src : economictimes.indiatimes.com)

Bengaluru: Walmart inc's Flipkart will invest Rs. 1500 crore (203.78 million dollars) in ABFRL (Aditya Birla fashion and retail Ltd.) for a 7.8% stake, the fashion apparel company said on Friday.

"The equity capital will be raised at Rs. 205 per share. with this infusion, the Flipkart group will own a 7.8% equity stake in ABFRL on a fully diluted basis() . the company promoter and promoter group company of Birla group will hold about 55.13% upon completion of the issuance, " it added.

Kumar Mangalam Birla, chairman of Aditya Birla group said, " This partnership is an emphatic endorsement of the growth potential of India. It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100bn in the next 5 years. fashion retail in India is set for robust long term growth due to the strong fundamentals of a large and growing middle class, favorable demographics, rising disposable income, and aspiration for brands."

ABFRL further said that it will aggressively accelerate the execution of its large-scale digital transformation strategy that will deepen the consumer connect of its brands.

Kalyan Krishnamurthy, CEO of Flipkart group said," at the Flipkart group, we are focused on building a new partnership that will help us meet demands of the discerning Indian consumer who seek quality and value. Through this transaction with ABFRL, we will work towards making available a wide range of products for fashion-conscious across different retail formats across the county."

The transaction is subject to regulatory and other customary approvals.

Future of this deal

Aditya Birla fashion and retail limited plans to use this capital to strengthen its balance sheet and accelerate its growth. Through this deal Flipkart and ABFRL will get a positive result, Flipkart gets the retail products at low cost and demanding customer to make flow in the market on the other hand Birla fashion and retail gets fund after this deal.

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