Aditya Birla Fashion plans to spin off Madura Fashion business into independent listed company

Aditya Birla Fashion and Retail Ltd (ABFRL) authorized the management to evaluate the vertical demerger of Madura Fashion & Lifestyle. The proposed demerger will create two separate listed companies for independent growth opportunities with distinct capital structures.

The Madura Fashion & Lifestyle (MFL) segment, including popular brands like Louis Phillippe, Van Heusen, Allen Solly, and Peter England, will be demerged into a separate listed entity. This move aims to strengthen the entity’s balance sheet for future growth. The demerger will be implemented through an NCLT scheme of arrangement.

ABFRL will focus on high-growth segments post-demerger, targeting the shift from unbranded to branded products, premiumisation, and rapid growth in digital-first brands. The company plans to raise growth capital within 12 months to boost its balance sheet strength.

Kumar Mangalam Birla, Chairman of Aditya Birla Group, highlighted the transformation of their fashion and retail business over the years. The strategic realignment aims to unlock value creation opportunities and enhance long-term stakeholder value. Shares of Aditya Birla Fashion and Retail rose by 3 per cent on Monday.

“As the platform embarks on its next transformational phase of growth, there is scope to re-evaluate the capital structures to optimise the different parts of the portfolio. The move towards a more simplified and streamlined architecture is designed to unlock distinct opportunities for value creation. This strategic realignment is poised to significantly enhance the long-term stakeholder value,” said Kumar Mangalam Birla.