An affiliate of Singaporean sovereign wealth fund GIC is investing up to Rs21.95bn ($282.7m) in Indian fashion retailer Aditya Birla Fashion and Retail (ABFRL).
As part of the agreement, GIC will initially invest Rs7.70bn towards the subscription of equity and warrants, as well as up to Rs14.25bn in one or more tranches within 18 months upon the exercise of warrants.
Once the entire investment has been made, GIC will own a 7.5% equity stake in ABFRL, while Aditya Birla Group will continue to hold a 51.9% stake.
ABFRL will use the proceeds from the investment to expedite its businesses’ growth.
The deal’s completion depends on receiving regulatory and other customary approvals.
ABFRL managing director Ashish Dikshit said: “In the last few years, ABFRL has built a strong presence across all large and attractive segments of the Indian fashion market through organic and inorganic actions.
“This capital infusion will allow us to accelerate the growth of this platform of strong brands and well-established retail formats in the fast-growing branded apparel market and fortify our position as one of the leading players in the industry.
“We look forward to benefiting from GIC’s extensive experience of investing in businesses globally and its long-term orientation as we plan to expand our presence and significantly enhance our digital play in the coming years to benefit from rapidly evolving consumer habits.”
GIC private equity chief investment officer Choo Yong Cheen said: “We are delighted to partner with ABFRL to bring our long-term capital and resources to support its next phase of growth.
“We are confident that the company is well-positioned to continue its transformational journey into a future-ready consumer company powered by the growth of India.”
ABFRL operates several major fashion brands in India, including Van Heusen, Allen Solly and Peter England.
In January, the company entered an agreement to acquire a majority stake in fashion lifestyle brand Masaba for an undisclosed amount.