Aditya Birla Fashion, a major apparel retailer, saw a 12% surge in its share price.
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.
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 contributes 58.5% of total revenue and 57% of the total EBIT on a consolidated basis.
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.
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
ABFRL will also be raising capital within 12 months of the merger to improve the balance sheet of the remaining entity.
Demerging of Madura fashions will be a value-unlocking opportunity for investors as Madura will have most of the major brands under its portfolio.