Flipkart to Invest Rs. 1,500 Crore in Aditya Birla Fashion & Retail
Oct. 23, 2020Flipkarthas today signed an agreement with Aditya Birla Fashion and Retail Limited (ABFRL) toinvest Rs. 1,500 crorein the latter for a 7.8% stake. In a statement on Friday, the Birla Group company said that the agreement would involve the sale and distribution of various ABFRL brands, along with offering preemption rights and the right of first refusal to Flipkart for 1-5 years.
Kalyan Krishnamurthy, the CEO of the Flipkart Group, also expressed his satisfaction at the deal, saying:“Through this partnership with ABFRL, we will work towards making available a wide range of products for fashion-conscious consumers across different retail formats across the country.”
The company plans to use the money to scale-up its existing businesses in sectors where it already has a strong position while increasing presence in emerging high-growth categories, such as innerwear, athleisure, casual wear, and ethnic wear. As perMoneycontrol, the company believes that these will soon emerge as the fastest 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, said:“This partnership is an emphatic endorsement of the growth potential of India. It also reflects our strong conviction in the future of the apparel industry in India, which is poised to touch $100 billion in the next 5 years.”
This investment from Flipkart comes only a few weeks afterReliance Retaildecided to acquire Future Group’s retail businesses. It will enable Reliance to boost not only their offline but alsoJioMart, its up-and-coming grocery delivery business. Amazon India is, however, fighting a legal battle against Reliance and Future Group as itindirectly ownsabout 5 percent share in the company.
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