Aditya Birla Fashion to raise $500 million equity via preferential issue, QIP

The board of Aditya Birla Fashion and Retail Ltd on Wednesday approved raising of $500 million through a combination of preferential issuance and Qualified Institutional Placement (QIP) of equity shares.

The preferential issuance of $275 million will be led by the promoter group investing $150 million and Fidelity Investments investing $125 million, the company said.

“The promoter participation is at a significant premium of 17.5% over Tuesday’s closing price, signalling strong conviction in the value creation potential of ABFRL,” the company added.

The preferential allotment will be subscribed by Fidelity Investments through its funds viz. Fidelity Blue Chip Growth Fund, Fidelity Blue Chip Growth Commingled Pool, Fidelity Blue Chip Growth K6 Fund, Fidelity Series Blue Chip Growth Fund & FIAM Target Date Blue Chip Growth Commingled Pool.

The Board also approved an equity issuance through QIP for up to $225 million, taking the total fund raise to $500 million

“This combined fund raise will deleverage the company and position it to aggressively pursue its growth strategy through its multiple growth engines established over the last few years,” the company said.

“This capital raise marks an important milestone ahead of the proposed vertical demerger of the company into two separately listed entities. The demerger exercise is expected to be completed by the end of this financial year,” it added.

The shareholder’s meeting for approving the preferential issuance is scheduled for 13 February 2025 and the relevant date for pricing of issuance will be taken as 14 January 2025.