Aditya Birla Fashion jumps 12% amid demerger plans

A sudden one-day jump!

Aditya Birla Fashion, a major apparel retailer, saw a 12% surge in its share price.

What led to this rise?

The latest media release from Aditya Birla Fashion and Retail Limited (ABFRL) talks about plans to demerge Madura Fashion & Lifestyle and list it as a separate entity.

More about the new company

It will consist of four major brands such as Louis Phillippe, Van Heusen, Allen Solly and Peter England along with American Eagle, Forever 21 and Reebok.

Madura F&L share of the revenue and operating profits

Madura F&L contributes 58.5% of total revenue and 57% of the total EBIT on a consolidated basis.

Madura F&L’s rapid growth

Madura F&L not only accounts for a major share in ABFRL’s arsenal, but it also has shown the highest growth rate of 14 per cent per annum in the last 5 years.

What’s the game plan for ABFRL?

ABFRL aims to take advantage of: The shift from unbranded to branded. Premiumisation Growth in the luxury segment Rapid growth in Gen Z-focused digital-first brands

Contd…

ABFRL will also be raising capital within 12 months of the merger to improve the balance sheet of the remaining entity.

The opportunities ahead

Demerging of Madura fashions will be a value-unlocking opportunity for investors as Madura will have most of the major brands under its portfolio.

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