Walmart-backed Flipkart has offloaded its entire 6 per cent holding in Aditya Birla Fashion & Retail Ltd (ABFRL), the owner of brands like Pantaloons, in a Rs. 582 crore (US $ 67.68 million) bulk deal.
The deal contributes to a larger trend of sales by promoters and big institutional investors during a market rally. Numbers from Prime Database indicate that such investors have sold shares worth around Rs. 43,400 crore (US $ 5.04 billion) in May alone.
ABFRL has struggled to keep pace with the market in recent months, with its stock down around 11 per cent over the past year. The Flipkart exit follows a significant restructuring move by the Aditya Birla Group, which recently carved out the Madura Fashion & Lifestyle division into a new listed entity, Aditya Birla Lifestyle Brands Ltd (ABLBL).
ABLBL will now own marquee brands such as Louis Philippe, Van Heusen, Allen Solly, Peter England, Reebok, and international brands like American Eagle and Forever 21, along with Van Heusen’s innerwear range.
As a part of the demerger, Rs. 1,000 crore (US $ 116.28 million) out of ABFRL’s Rs. 3,000 crore (US $ 349 million) debt of 31st March 2024, will transfer to the newly created ABLBL, and Rs. 2,000 crore (US $ 232 million) in obligations will continue to stay with ABFRL. The group also plans to raise Rs. 2,500 crore (US $ 290 million) within a year of the demerger, and funding is likely to see promoter support.
