Flipkart to divest stake in Aditya Birla Fashion for $112M
What's the story
Flipkart Investments Private Limited, the investment arm of Walmart-owned e-commerce giant Flipkart, is planning to sell up to 6% of its stake in Aditya Birla Fashion and Retail Ltd. The deal, which is expected to generate around $112 million (₹935 crore), will be executed through a block deal. The move is part of Flipkart's portfolio rationalization strategy as it re-aligns its investments in India's retail sector.
Past partnership
Background on Flipkart's investment in Aditya Birla Fashion
Flipkart invested in Aditya Birla Fashion back in 2020, as part of a strategic partnership to enhance omni-channel capabilities for fashion and lifestyle brands. The company is one of India's top branded apparel players with a portfolio that includes Pantaloons, Van Heusen, Allen Solly, and Louis Philippe. In recent years, it has also ventured into ethnic wear and luxury fashion partnerships.
Stake reduction
Exit from a major shareholding position
Once the deal is finalized, Flipkart's stake in Aditya Birla Fashion will drop to below 3%. This will mark an exit from a major shareholding position for the e-commerce giant. The offer price range for the sale has been set at ₹130.00 and ₹136.45 per share, which is up to 4.7% lower than the stock's last closing price.
Market factors
Block deal expected to be executed on Monday
The block deal is expected to be executed on the stock exchanges tomorrow, depending on market conditions. Further details about the deal, including who the buyers or institutional investors are, have not been revealed yet.