Aditya Birla Fashion and Retail Ltd (ABFRL) experienced a significant surge in its share price, jumping by 15% following the company’s announcement of plans to demerge its Madura Fashion & Lifestyle business into a separate listed entity. This move has sparked investor enthusiasm, propelling the share price to an intra-day high of Rs 243.45 on the Bombay Stock Exchange (BSE). The trading session witnessed heavy volumes, with 3 crore shares changing hands, a substantial increase compared to the one-week average.
The proposed demerger aims to create two distinct listed companies, each operating as independent growth engines with unique capital structures and value creation opportunities. ABFRL’s management highlighted that this strategic realignment will enhance long-term stakeholder value and unlock new avenues for growth. The demerger, subject to necessary approvals, will be executed through an NCLT scheme of arrangement, ensuring that all shareholders of ABFRL hold identical shareholding in the newly formed entity.
Post-demerger, ABFRL will focus on high-growth segments, including branded retail, premiumization, luxury brands, and digital-first offerings. The revamped portfolio will encompass value retail, ethnic wear, luxury brands, and digital platforms. Notable brands like Louis Phillippe, Van Heusen, Allen Solly, Peter England, American Eagle, Forever 21, Reebok, and Van Heusen innerwear will form part of the new listed entity.
The company also plans to raise growth capital within 12 months post-demerger to strengthen its financial position and pursue significant growth opportunities. Aditya Birla Fashion’s strategic restructuring underscores its commitment to driving sustained growth, value creation, and shareholder confidence in the evolving retail landscape.
