Shares of Aditya Birla Fashion and Retail Ltd. (ABFRL) declined over 2% in early trade on Wednesday, May 21, ahead of the record date for the demerger of its Madura Fashion and Lifestyle business. The stock slipped 2.41% to ₹270.75, compared to the previous close of ₹277.45.
Wednesday marks the final session for investors to purchase ABFRL shares under the T+1 settlement cycle to qualify for shares in the new entity, Aditya Birla Lifestyle Brands Ltd. As per the demerger scheme, shareholders will receive one share of the newly formed company for every share held in ABFRL (1:1 ratio).
The ex-date and record date fall on May 22. During a special pre-open session, the price discovery mechanism will determine the value of Aditya Birla Lifestyle Brands Ltd., which will be subtracted from ABFRL’s stock price to reflect the value of the spin-off.
Post demerger, Aditya Birla Lifestyle Brands will own a premium portfolio, including brands like Louis Phillippe, Van Heusen, Allen Solly, Peter England, and Reebok, along with casual wear labels American Eagle and Forever 21, and the innerwear business under Van Heusen.
The move is part of the group’s strategy to unlock value by creating two focused businesses with distinct growth trajectories.
