Aditya Birla Fashion and Retail stock price today: ABFRL shares zoom 10% on demerger news

Aditya Birla Fashion and Retail share price today: Aditya Birla Fashion and Retail (ABFRL) saw a 10% increase in shares on Tuesday, reaching Rs 232.85 on BSE and hitting the upper circuit. The surge followed the company’s announcement of considering the vertical demerger of Madura Fashion & Lifestyle business from ABFRL into a separate listed company.
This move aims to establish two independent companies with unique capital structures and growth opportunities, states an ET report. Post-demerger, Aditya Birla Fashion and Retail will concentrate on high-growth areas such as branded segments, premiumization, luxury brands, and Gen Z -focused digital-first brands.
The revamped ABFRL portfolio will include value retail, ethnic wear, luxury brands, and digital offerings. Madura Fashion & Lifestyle business segment, consisting of popular brands such as Louis Phillippe, Van Heusen, Allen Solly, Peter England, American Eagle, Forever 21, Reebok, and Van Heusen innerwear, will form a new listed entity.
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Aditya Birla Fashion and Retail assured that the demerged entity will have a robust balance sheet to support its future growth plans. The demerger process, subject to approvals, will be executed through an NCLT scheme, ensuring identical shareholding for all Aditya Birla Fashion and Retail shareholders. Additionally, ABFRL plans to raise growth capital within a year post-demerger to bolster its financial position.
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Aditya Birla Group Chairman Kumar Mangalam Birla stated that the restructuring is aimed at unlocking value creation opportunities and enhancing long-term stakeholder value.
Despite Aditya Birla Fashion and Retail shares underperforming with a 9% one-year return compared to BSE Sensex’s 25% surge, the company remains optimistic about the strategic realignment’s benefits.