Aditya Birla Fashion and Retail Ltd (ABFRL) has demerged into two listed entities – ABFRL and Aditya Birla Lifestyle Brands Ltd (ABLBL) and has fixed Thursday, May 22 as the record date for this demerger.
In a regulatory filing on May 12, ABFRL had said, “…we wish to inform you that, in accordance with the terms of the Scheme, Thursday, May 22, 2025 has been fixed as the “Record Date” for the purpose of ascertaining the equity shareholders of the company who will be entitled to be issued equity shares of ABLBL pursuant to the Scheme.”
Demerger ratio
Per the filing, shareholders of Aditya Birla Fashion will be eligible to receive one share of the demerged entity, Aditya Birla Lifestyle Brands Ltd, for every one share that they own as of the record date. “…1 fully paid-up equity share of ABLBL having face value of Rs 10 each for every 1 fully paid-up equity share of Rs 10 each of the company shall be issued and allotted by ABLBL to the equity shareholders of the company holding equity shares as on the Record Date,” it said.
The said equity shares to be allotted by ABLBL are proposed to be listed with BSE Limited and the National Stock Exchange of India Limited.
Rationale for demerger
Post the demerger, ABLBL and ABFRL will operate as two independent growth engines with distinct capital structures, clear capital allocation and parallel value creation trajectories.
Per the official statement, the Group has articulated the many positives that will arise from the demerger. The operating architecture for both companies, it said, will allow sharper focus on their individual business strategies. Further, the company added, the demerger will help existing shareholders unlock value for the overall business portfolio through price discovery of the individual entities. “Separately listed companies can attract specific investors basis their business profile,” the company said while adding that the two entities will be able to address stronger capital market outcomes.
ABLBL is positioned to unlock cash flow that can drive rapid growth. With its high return on capital employed (ROCE), the company has a clear path to generating independent value, supporting a strong outlook for both growth and profitability.
The demerged ABFRL will focus on larger market segments (TAM) with high growth, leveraging its strengths in distribution.
ABLBL’s strong balance sheet will continue to support its growth plans in India, the company said in a statement. The demerged ABFRL business, it added, also shows strong potential, with popular brands in fast-growing segments and access to a large market. It is well-positioned to benefit from trends like consumers moving from unbranded to branded clothes, increasing demand for premium products, and a rising Gen Z audience that prefers online and digital-first brands. To tap into this opportunity, ABFRL plans to raise funds to support its growth, the company said.
Portfolio of brands under two entities
Post demerger, ABFRL will house brands like Pantaloons and StyleUp; ethnic segment housed under TCNS Clothing; designer led brands including Sabyasachi, Shantnu and Nikhil, House of Masaba, Tarun Tahiliani; premium wear brands like Tasva, TCNS Brands, Jaypore; super premium brands like The Collective & Mono Brands; and luxury retail brands like Galaries Lafayette, Christian Louboutin. It will also house digital first brands including Bewakoof, The Indian Garage Co, Wrogn, Urbano, Veirdo, Nobero, Juneberry.
Meanwhile, the new entity Aditya Birla Lifestyle Brands Ltd will hold brands like Louis Philippe, Van Heusen, Peter England, Allen Solly, Simon Carter, Reebok, Van Heusen innerwear and American Eagle, in its kitty.
The demerged entity will also be housing the Madura Fashion Ltd brands.
“Aditya Birla Group’s plans for the next five years for its two fashion businesses are hugely exciting and inspiring. With complementary strengths, distinct portfolios, and independent growth agendas, both entities are now better equipped to scale new heights. ABLBL’s vision is to double in scale and triple in cash profits. The demerged ABFRL entity plans to grow three-fold in scale,” the company said in a statement.
Shares of ABFRL were down 2.04 per cent at 5:10 pm today at a trading price of Rs 271.15.