Aditya Birla Fashion to demerge lifestyle business, list it on exchanges

The proposed demerger and subsequent listing will enable the companies function as independent growth engines with distinct capital structures and parallel value creation opportunities, the Aditya Birla Group firm said in an exchange filing.

All shareholders of Aditya Birla Fashion and Retail will have identical shareholding in the newly formed entity, the company said.

The lifestyle portfolio has built a leadership position, besides delivering consistent revenue growth, profitability, strong free cash flows and high return on capital. The entity will have a strong balance sheet to power its future growth aspirations, the company said.

After receiving necessary statutory approvals, the demerger will be implemented through an NCLT scheme of arrangement.

Subsequent to the completion of the demerger, Aditya Birla Fashion will raise growth capital within 12 months to strengthen its balance sheet and fund expansion plans.

“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 of Aditya Birla Group.

Post demerger, Aditya Birla Fashion plans to focus on high-growth segments where there are tailwinds from a shift from unbranded to branded, premiumization, rise of super premium and luxury brands.

“This is an attractive portfolio comprising of multiple high growth segments in large addressable markets with strong value creation opportunities,” the retailer said.

The post-demerger portfolio of Aditya Birla Fashion will consist of value retail business under Pantaloons & Style Up, the ethnic portfolio, luxury platforms of The Collective, Galleries Lafayette & select luxury brands, besides the digital brands.

On Monday, shares of Aditya Birla Fashion ended 3% higher on the BSE at Rs 211.70.