Tailored for Growth: Aditya Birla Fashion’s Demerger to Stitch Up New Opportunities—6 Key Insights

Aditya Birla Fashion and Retail Ltd (ABFRL) has confirmed that Thursday, May 22, 2025, is the date on which the record for the demerger of its lifestyle business into a new company, called Aditya Birla Lifestyle Brands Ltd (ABLBL), will take effect. 

 

 Here are six key points of information that investors need to know:

 

 Record Date and Eligibility: The record date means shareholders holding ABFRL shares at the close of the market on Wednesday, May 21, will, on account of getting shares in the demerged new entity, ABLBL on a 1:1 basis. This means that for every one share held in ABFRL, investors will be issued one share of ABLBL.

 

 Entities post-Demerger: The proposed demerger means shareholders in ABFRL will end up with two listed entities- ABFRL and ABLBL. ABFRL will hold brands such as Pantaloons, StyleUp, the ethnic and designer portfolio (including Sabyasachi, Tarun Tahiliani, Masaba and Shantanu & Nikhil) and premium/luxury retail brands. ABLBL, in turn, will hold brand names like Louis Philippe, Van Heusen, Peter England, Allen Solly and Reebok and American Eagle brands and Van Heusen inner wear business.

 

 Share Price Adjustment: The share price will be adjusted on May 22, both the record date and the ex-dividend date, to take into account the spin-off. A special pre-open session on May will determine what the constant share price of the new shares of ABLBL is based on the close price for ABFRL on May 21 and opening price for ABLBL shares on May 22.

 

 Listing of newly allotted shares: The newly allotted shares ABLBL is proposed to be listed on the BSE and NSE with a designated date to be announced separately.

 

 Financial Implications: The borrowings of the company are approximately ₹3000 crore as at 31 March, 2024 and the new company ABLBL will be allocated approximately ₹1000 crore of borrowings. ABFRL is also considering raising approximately ₹2500 crore within 12 months after the completion of the demerger to repair, strengthen and expand the company’s balance sheet and conduct operations.

 

 Strategic Rationale: With the proposed demerger, they expect that both entities will focus on their core strengths, premium lifestyle and fashion for ABLBL, and accordingly build the broader retail and ethnic ethos for ABFRL. Each respective management will engage an independent growth agenda with an aim of 13% CAGR in revenue and an enhanced margin for ABLBL over the life of FY25-FY30.

 

Source: CNBC TV18