Aditya Birla Fashion and Retail board approves fundraising through issuance of preferential shares

Aditya Birla Fashion and Retail Ltd. (ABFRL) announced that its board has approved a plan to raise substantial funds through the issuance of equity shares on a preferential basis. The proposal, which is subject to shareholder and regulatory approvals, aims to infuse capital into the company by engaging both promoter and institutional investors.

Under the approved plan, ABFRL intends to issue up to 4,08,72,580 equity shares under the promoter/promoter group category. These shares, with a face value of ₹10 each, will be issued at a price of ₹317.45 per share, which includes a premium of ₹307.45 per share. This issuance is expected to raise ₹1,297.5 crore for the company.

Additionally, the company plans to issue up to 3,96,97,838 equity shares to qualified institutional buyers under the non-promoter category. These shares, also carrying a face value of ₹10 each, will be offered at ₹272.37 per share, inclusive of a premium of ₹262.37 per share. The total amount raised through this route is estimated at ₹1,081.25 crore.

The board has also scheduled an Extraordinary General Meeting (EGM) for February 13, 2025, to seek shareholder approval for these fundraising activities. The move underscores the company’s commitment to securing financial flexibility to support its growth initiatives.

Furthermore, ABFRL reaffirmed its plan to raise up to ₹2,500 crore through a Qualified Institutions Placement (QIP). This proposal, initially approved by shareholders during the Annual General Meeting on September 19, 2024, aligns with the company’s long-term funding strategy. The QIP will be conducted in accordance with applicable regulations under SEBI ICDR and the Companies Act, 2013, subject to regulatory clearances.

These measures are expected to bolster ABFRL’s financial position and enable it to capitalize on opportunities in the evolving retail landscape. The proposed capital infusion highlights the company’s strategic focus on strengthening its market presence and expanding its operations.

Stock Price Trend

The stock fell as much as 2.5 percent to its day's low of ₹263.40. The scrip is now around 28 percent away from its 52-week high of ₹364.50, hit in September 2024. Meanwhile, it has advanced almost 33 percent from its 52-week low of ₹198.45, recorded in March 2024. In the last 1 year, the stock has added 17 percent while in January so far, it has shed over 4 percent, extending losses after an 11 percent fall in December.