Flipkart to invest Rs 1500 crore to buy 7.8% stake in Aditya Birla Fashion

Aditya Birla Fashion has successfully convinced E-commerce giant Flipkart for buying a 7.8% stake in the company for 1500 crore at a price of Rs 205 per share.

Aditya Birla Fashion has successfully convinced E-commerce giant Flipkart for buying a 7.8% stake in the company for 1500 crore at a price of Rs 205 per share. The money will be used for the acceleration towards company growth. The company is expected to focus on its strengths and market-leading positions while increasing presence in emerging high-growth categories such as innerwear, athleisure, casual wear, and ethnic wear, establishing these as the new engines of growth for the company.

Kumar Mangalam Birla, Chairman of the Aditya Birla Group said, “This partnership is an emphatic endorsement of the growth potential of India. It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100 billion in the next 5 years.”

Aditya Birla Fashion and Retail Ltd.(ABFRL) was in talks with E-commerce giants, Amazon, and Flipkart seeking potential investment. The company is suffering from the adverse financial effect of COVID-19 and is been in the market to seek investments either through a hive-off or partnerships. The potential investment by Flipkart will give a boost to company growth.

By this major investment by Flipkart, Aditya Birla Fashion would have successfully executed a capital raise of Rs 2500 crore since 01 April 2020, despite the challenging macroeconomic conditions since the onset of COVID 19, the company said.

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