Aditya Birla Fashion and Retail Ltd (ABFRL) has successfully demerged its Madura Fashion & Lifestyle (MFL) division into a new, separately listed entity named Aditya Birla Lifestyle Brands Ltd (ABLBL). This strategic move aims to unlock value by allowing each business to pursue tailored growth strategies and optimize capital structures.
📊 Financial Overview (FY23)
| Metric | ABFRL (Consolidated) | Madura Fashion (ABLBL) |
|---|---|---|
| Revenue | ₹12,418 crore | ₹7,959 crore |
| Operating Profit | Not specified | Not specified |
| Net Profit / (Loss) | ₹(59) crore | Not specified |
Note: Detailed operating and net profit figures for Madura Fashion are not separately disclosed.
🏢 Post-Demerger Business Structure
Aditya Birla Lifestyle Brands Ltd (ABLBL):
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Core Brands: Louis Philippe, Van Heusen, Allen Solly, Peter England
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Casual Wear: American Eagle, Forever 21
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Sportswear: Reebok
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Innerwear: Van Heusen
Aditya Birla Fashion & Retail Ltd (ABFRL):
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Value Retail: Pantaloons, Style Up
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Ethnic & Designer Wear: Sabyasachi, Shantanu & Nikhil, Tasva, TCNS
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Luxury & International Brands: The Collective, Galeries Lafayette, Ralph Lauren, Fred Perry
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Digital-First Brands: TMRW
🔄 Shareholding & Capital Structure
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Share Entitlement: ABFRL shareholders receive 1 share of ABLBL for every 1 share of ABFRL held.
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Promoter Holding: Aditya Birla Group holds 49.25% in ABFRL as of September 30, 2024. Post-demerger, promoter holdings in ABLBL are expected to mirror this stake.
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Debt Allocation: Total debt of ₹3,000 crore is split, with ₹1,000 crore allocated to ABLBL and the remaining ₹2,000 crore retained by ABFRL.
💰 Capital Raising Plans
ABFRL plans to raise ₹2,500 crore in equity capital within 12 months post-demerger to strengthen its balance sheet and fund growth initiatives. The promoter group has committed full support for this capital raise.
📈 Strategic Rationale
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Value Unlocking: The demerger allows investors to value the high-margin Madura business independently from ABFRL's other ventures.
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Focused Growth: Each entity can pursue tailored strategies—ABLBL focusing on its established brands, and ABFRL on scaling its value, ethnic, luxury, and digital portfolios.
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Operational Efficiency: Separate entities enable optimized capital allocation and operational focus.
This demerger positions both ABFRL and ABLBL to capitalize on their respective market opportunities, with clearer strategic focus and potential for enhanced shareholder value.
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