Walmart-possessed Flipkart will get a 7.8% stake in Aditya Birla Fashion and Retail, run by extremely rich person Kumar Mangalam Birla, for 15 billion rupees ($204 million) as it moves to tap the offline retail player’s huge bank of clothing outlets.
Flipkart needs to fight off multimillionaire Mukesh Ambani-run Reliance Industries, which is quickly extending its retail business using significant acquisitions and financing from abroad investors, including Silver Lake and KKR.
Flipkart will purchase particular shares that Aditya Birla Fashion will issue at a cost of 205 rupees each, as per a joint statement given on Friday. The cost is 33.6% higher than Aditya Birla Fashion’s end cost of 153.4 rupees on Thursday. Aditya Birla Fashion’s present owners will hold a 55.1% stake after the portion.
Aditya Birla Fashion has an organization of around 3,000 stores, including the Pantaloons fashion chain. It likewise has a presence across roughly 23,700 multiband outlets with more than 6,700 retail locations in retail chains.
“We will work towards making available a wide range of products for fashion-conscious consumers across different retail formats across the country. We look forward to working with ABFRL and its well established and comprehensive fashion and retail infrastructure as we address the promising opportunity of the apparel industry in India,” Kalyan Krishnamurthy, CEO of Flipkart said.
Flipkart will gain from Aditya Birla Fashion’s range of international and Indian brands. Also, it expects its technological expertise to enhance Aditya Birla Fashion’s Omni channel capabilities.
As far as concerns its, Aditya Birla Fashion intends to utilize the capital mixture to reinforce its asset report and quicken its development direction. The company plans to increase its presence in categories such as underwear, athleisure, casual wear, and ethnic wear.
Aditya Birla Fashion has successfully raised around 25 billion rupees since April, even as the COVID-19 pandemic and accompanying lockdowns across India have severely impacted footfalls in offline stores. In August, Reliance Retail Ventures, an arm of Reliance Industries, announced a plan to buy Indian retail pioneer Future Group’s units for 247.13 billion rupees. Reliance Industries is heading for an aggressive fight not only in the online space but in e-commerce as well, where it will square off against Flipkart and Amazon India.