Home industry lifestyle-and-fashion ABFRL Board Approves Demerger of Madura Fashion; Plans Rs 2,500 Crore Equity Raise

ABFRL Board Approves Demerger of Madura Fashion; Plans Rs 2,500 Crore Equity Raise

Lifestyle And Fashion

ABFRL Approves Demerger of Madura Fashion

CIO Bulletin
2024-04-22

Aditya Birla Fashion and Retail (ABFRL) moves forward with a vertical demerger of Madura Fashion and Lifestyle.

The board of Aditya Birla Fashion and Retail (ABFRL) has greenlit the vertical demerger of its Madura Fashion and Lifestyle (MFL) business. This move will see MFL transition into a newly established entity, Aditya Birla Lifestyle Brands (ABLB).

As part of the restructuring plan, ABFRL aims to raise Rs 2,500 crore in equity capital within a year following the demerger. This capital infusion, bolstered by promoter participation, will fortify the company's balance sheet and fuel growth across its remaining businesses. ABFRL's promoter group has pledged full support for the proposed equity raise.

The decision to pursue the vertical demerger was initially endorsed by ABFRL's board on April 1, authorizing the company's management to explore the separation of MFL from ABFRL into a distinct, listed company.

Upon the completion of the demerger, shareholders of ABFRL will receive one share of ABLB for every ABFRL share they hold, in addition to retaining their existing shareholding in ABFRL. Additionally, ABFRL will manage its fast-growing luxury segment through The Collective, Galleries Lafayette, select luxury brands, and its digital-first fashion brands under TMRW.