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Business News/ Markets / Stock Markets/  Aditya Birla Fashion upper circuit: Aditya Birla Fashion shares jump 15% on proposed demerger of Madura Fashion
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Aditya Birla Fashion upper circuit: Aditya Birla Fashion shares jump 15% on proposed demerger of Madura Fashion

Aditya Birla Fashion upper circuit: Aditya Birla Fashion and Retail Ltd. (ABFRL) said it is evaluating the vertical demerger of Madura Fashion & Lifestyle business from itself into a separate listed company.

Aditya Birla Fashion upper circuit: Aditya Birla shares gained over 6% this year so far, while the stock is up more than 11% in one year. (Photo: Pixabay)Premium
Aditya Birla Fashion upper circuit: Aditya Birla shares gained over 6% this year so far, while the stock is up more than 11% in one year. (Photo: Pixabay)

Aditya Birla Fashion shares were locked in 15% upper circuit on Tuesday after the company announced the plan for the demerger of Madura Fashion & Lifestyle business from itself into a separate listed entity. Aditya Birla Fashion share price jumped to a high of 243.45 apiece on the BSE.

Aditya Birla Fashion shares also traded with heavy volumes as a total of 3 crore shares changed hands today as against one one-week average of 30 lakh shares.

Aditya Birla Fashion and Retail Ltd (ABFRL) on Monday said it is evaluating the vertical demerger of Madura Fashion & Lifestyle business from itself into a separate listed company. 

Read here: ABFRL proposes demerger of Madura Fashion into separate listed entity

Aditya Birla Fashion Demerger

“The proposed demerger will enable the creation of two separately listed companies as independent growth engines with distinct capital structures and parallel value creation opportunities," the company said in an exchange filing.

Post necessary approvals, the demerger will be implemented through an NCLT scheme of arrangement, and all shareholders of ABFRL will have identical shareholding in the newly formed entity, it added.

Subsequent to the completion of the proposed demerger, ABFRL will raise growth capital within 12 months to infuse strength into its balance sheet.

“The restructuring will help bring in sharper focus anchored on a differentiated strategy aligned with the individual business segment. Each of these businesses have always been operated autonomously under respective CEOs," said Ashish Dikshit, MD, Aditya Birla Fashion and Retail Ltd.

The simplified structure positions the businesses well for sustained growth and value creation, he added.

Two entities

Madura Fashion & Lifestyle business segment (MFL) consists of four lifestyle brands, viz., Louis Phillippe, Van Heusen, Allen Solly & Peter England along with casual wear brands American Eagle and Forever 21. It also houses sportswear brand Reebok.

The post-demerger portfolio of ABFRL would consist of Value Retail, Ethnic Portfolio, Luxury and Digital brands.

Also Read: Adani Power upper circuit: Adani Power share price zooms 5% for 2nd consecutive day; what should investors do?

“The move towards a more simplified and streamlined architecture is designed to unlock distinct opportunities for value creation. This strategic realignment is poised to significantly enhance long-term stakeholder value," said Kumar Mangalam Birla, Chairman, Aditya Birla Group.

Aditya Birla shares gained over 6% this year so far, while the stock is up more than 11% in one year.

At 10:00 am, Aditya Birla Fashion shares were trading 13.37% higher at 240.00 apiece on the BSE.

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Published: 02 Apr 2024, 09:58 AM IST
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