Singapore sovereign wealth fund GIC, one of the most active among its global peers in India, has struck a deal to invest Rs 2,195 crore ($283 million) in Aditya Birla Fashion and Retail Ltd (ABFRL), to help it compete better with Reliance Brands and other VC-backed new-age direct-to-consumer labels.
GIC will invest in the publicly listed company via a preferential issuance of equity and warrants. Initially, it will invest Rs 770 crore ($100 million) towards subscription of equity and warrants, followed by up to Rs 1,425 crore in one or more tranches within 18 months upon exercise of warrants.
After the entire investment, GIC will own an around 7.5% equity stake in ABFRL while the Aditya Birla Group will hold 51.9%.
Choo Yong Cheen, Chief Investment Officer of Private Equity for GIC, said, “ABFRL has a strong track record of building brands and its new business lines, including innerwear and ethnic wear, have strong structural tailwinds. We are confident that the company is well-positioned to continue its transformational journey into a future-ready consumer company powered by the growth of India.”
Pankaj Sood, Head of Direct Investments, India and Africa, GIC, added: “Branded apparel is a large and attractive market, and we believe that ABFRL is well-positioned with its best-in-class management team, strong portfolio of brands, and robust plan for capturing the next phase of digital-led growth.”
ABFRL is part of Aditya Birla Group. With revenue of Rs 8,136 crore, spanning retail space of 9.2 million sq. ft., it is one of India’s leading pure-play fashion houses. The company has a network of 3,468 exclusive stores, 6,515 points of sale in department stores and 28,585 multi-brand outlets across India, as on March 31, 2022.
It houses some of the most well-known apparel brands in India including Louis Philippe, Van Heusen, Allen Solly and Peter England, established over 25 years. Pantaloons is amongst India’s eminent fashion retailers.
Ashish Dikshit, MD of ABFRL said, “In the last few years, ABFRL has built a strong presence across all large and attractive segments of the Indian fashion market through organic and inorganic actions. This capital infusion will allow us to accelerate the growth of this platform of strong brands and well-established retail formats in the fast-growing branded apparel market & fortify our position as one of the leading players in the industry.”
The company has also built a presence in innerwear and athleisure segments under the Van Heusen brand. Its international brands portfolio includes The Collective and exclusive partnerships with Ralph Lauren, Hackett London, Ted Baker, Fred Perry, Forever 21, American Eagle and Reebok.
It is also present in the branded ethnic wear segment with brands such as Jaypore, Tasva and Marigold Lane. In addition, it has partnerships with designers Shantanu & Nikhil, Tarun Tahiliani, Sabyasachi and House of Masaba.
ABFRL says it is also embarking on a direct-to-consumer play to build a portfolio of new-age brands across fashion, beauty and other lifestyle segments.