Flipkart to Invest Rs. 1,500 Crore in Aditya Birla Fashion & Retail - crutcherthowenty

Flipkart has today signed an agreement with Aditya Birla Fashion and Retail Limited (ABFRL) to invest Rs. 1,500 crore in the latter for a 7.8% stake. In a statement on Friday, the Birla Group company said that the agreement would regard the sale and distribution of various ABFRL brands, along with offer preemption rights and the right of first refusal to Flipkart for 1-5 years.

According to an official filing with the stock exchanges, the money would be embossed finished preferential allotment of shares to Flipkart, with the issue price set at Rs. 205 per share. According to ET, the price is 33.63 pct high than ABFRL's Thursday's closing price of Rs. 153.40.

Kalyan Krishnamurthy, the CEO of the Flipkart Group, also expressed his expiation at the deal, saying: "Through this partnership with ABFRL, we will work towards making available a large mountain range of products for fashion-conscious consumers across assorted retail formats across the nation."

The company plans to wont the money to scale leaf-up its alive businesses in sectors where it already has a strong position piece increasing presence in emerging high-ontogenesis categories, much as innerwear, athleisure, cursory wearing, and ethnic wear. Arsenic per Moneycontrol, the company believes that these will before long emerge as the quickest growing sectors in the Indian apparel market and will offer New engines of growth for the company.

Announcing the investment, Kumar Mangalam Birla, the Chairman of the Aditya Birla Group, aforesaid: "This partnership is an emphatic endorsement of the growth potential of India. Information technology also reflects our secure conviction in the ulterior of the apparel industry in India, which is poised to cutaneous senses $100 billion in the next 5 years."

This investment from Flipkart comes only a few weeks after Reliance Retail decided to take on Future Group's retail businesses. It will enable Reliance to boost not only their offline but also JioMart, its up-and-coming grocery store delivery job. Amazon Republic of India is, however, fighting a legal battle against Reliance and Future Group as IT indirectly owns roughly 5 percent share in the company.