Flipkart has invested Rs 1,500 crore in Aditya Birla Fashion and Retail or ABFRL for a minority stake of 7.8% on a fully diluted basis. The move will also help both the companies to leverage their synergies in the fashion segment. Having a network of around 3,004 stores with 23,700 multi-brand outlets across India.
This would be the second big deal in the offline consumer space in 2020 so far. Earlier in August, Reliance Industries' unit Reliance Retail Ventures acquired retail and wholesale business and the logistics and warehousing business from the Kishor Biyani-promoted Future Group as going concerns for a lumpsum amount of Rs 24,713 crore.
ABFRL board approved issuance of equity shares on a preferential basis to Flipkart Investments Private Limited, a foreign portfolio investor, duly registered under the Sebi (Foreign Portfolio Investors) Regulations, 2019, aggregating to Rs 1500 crore, the company told BSE.
The company has also, in furtherance of the existing B2B arrangements with Flipkart India Private Limited, entered into a commercial agreement in relation to the sale and distribution of various brands of the Company. The Preferential Issue is subject to shareholders' approval (by way of postal ballot), regulatory approval(s) and other customary conditions," the company said.
With this announcement, the scrip rose 2.67 per cent to hit a high of 157 on Bombay Stock Exchange (BSE).
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