In early trading on April 2, Aditya Birla Fashion & Retail’s (ABFRL) share price surged by the maximum 10% upper circuit following the board’s decision to evaluate the vertical demerger of its Madura Fashion & Lifestyle business from ABFRL into a separate listed company.
At 09:20 AM, Aditya Birla Fashion & Retail was trading at Rs 232.85 on the BSE, up Rs 21.15. The stock witnessed pending buy orders of 237,159 shares, with no sellers available.
Approximately 1.34 crore shares of ABFRL, equivalent to 1.41% equity, worth Rs 322.5 crore were traded at an average price of Rs 243 per share.
The proposed demerger aims to create two separately listed companies with distinct capital structures, providing parallel value creation opportunities, as stated by the company.
Post necessary approvals, the demerger will be executed through an NCLT scheme of arrangement, ensuring that all ABFRL shareholders hold identical shareholding in the newly formed entity.
Following the demerger, ABFRL will focus on high-growth segments, including value retail, ethnic wear, luxury brands, and digital-first fashion labels, positioning itself to capitalize on significant growth opportunities.
ABFRL intends to raise growth capital within 12 months post-demerger to strengthen its balance sheet and pursue the substantial growth potential across its portfolio.
