Aditya Birla Fashion and Retail announced today its board has approved raising $500 million through a combination of preferential share issue and qualified institutional placement (QIP) with the promoter group committing $150 million in the $275 million preferential portion to which Fidelity Investments will also contribute $125 million.

ABFRL, part of the Aditya Birla Group, plans to use the funds to reduce debt and support its growth strategy. Its shares were trading at ₹270.90 up by ₹0.80 or 0.30 per cent on the NSE today at noon.

The promoter group, through Pilani Investment and Industries Corporation, will invest $150 million at ₹317.45 per share, representing a 17.5 per cent premium over the previous day’s closing price.

Fidelity Investments will contribute $125 million at ₹272.37 per share through five of its funds, including the Fidelity Blue Chip Growth Fund as the largest investor.

The board has also approved an additional equity issuance through QIP for up to $225 million.

The company will seek shareholder approval for the preferential issue at an extraordinary general meeting scheduled for February 13, 2025.

The capital raise comes ahead of the company’s proposed vertical demerger into two separately listed entities, expected to be completed by the end of the current financial year.

Post-allotment, Pilani Investment’s shareholding will increase to 3.90 per cent from 0.37 per cent, while Fidelity’s funds will collectively hold about 3.45 per cent in the company.

The fashion retail giant operates a network of 4,538 stores and has presence in 37,952 multi-brand outlets across India as of September 30, 2024.

Its portfolio includes major brands such as Louis Philippe, Van Heusen, Allen Solly, and Peter England.

The company reported revenue of ₹13,996 crore and maintains a retail space of 11.9 million square feet as of March 31, 2024.