Flipkart exits Aditya Birla Fashion and Retail in Rs 582 crore bulk deal; ABFRL stock tumbles 11%

Walmart-owned Flipkart on Wednesday is understood to have sold its entire 6% stake in Pantaloons owner Aditya Birla Fashion & Retail (ABFRL) in a Rs 582 crore bulk deal this morning. The Birla Group stock fell 11.49% to the day's low at Rs 76.10 on BSE following the exit.

Flipkart Investments Private Limited had offered to sell its entire 73.17 million shares, amounting to 6% stake in ABFRL at a floor price of Rs 79.50 per share, which is at a 7.6% discount to the last closing share price, according to the term sheet.

Goldman Sachs is the sole bookrunner in this deal. Market sources confirmed that the deal was closed this morning.


The deal amount is likely to be around Rs 582 crore.

In the last few weeks, the market rebound has been marked by paring of stakes by promoters, PE and other large investors.

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Prime Database shows that in May alone, promoters and other large investors sold shares worth around Rs 43,400 crore.

ABFRL shares have been underperforming and have fallen around 11% in the last one year. The company had recently demerged the Madura Fashion & Lifestyle business into a separate listed entity - Aditya Birla Lifestyle Brands Limited (ABLBL).

ABLBL will house prominent brands such as Louis Philippe, Van Heusen, Allen Solly, Peter England, Reebok, and others, including casual wear lines like American Eagle and Forever 21, as well as the innerwear segment under Van Heusen.

As part of the restructuring, Rs 1,000 crore of ABFRL’s total borrowing of Rs 3,000 crore (as of March 31, 2024) will be transferred to ABLBL, while the remaining Rs 2,000 crore will stay with ABFRL.

The company also plans to raise Rs 2,500 crore within 12 months of the demerger, with promoter participation.