Aditya Birla Fashion Sets May 22 as Lifestyle Demerger Record Date
ABFRL announces May 22 as record date for lifestyle business demerger. Shareholders to receive 1:1 shares in Aditya Birla Lifestyle Brands Ltd.
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Aditya Birla Fashion and Retail Ltd. (ABFRL) has finalized May 22 as the record date for the demerger of its lifestyle division. This strategic move will separate its western wear and innerwear segments under a new entity named Aditya Birla Lifestyle Brands Ltd.
Investors holding ABFRL shares at market close on May 21 will be allotted one share of Aditya Birla Lifestyle Brands Ltd. for every share held. The demerger aims to streamline operations across distinct fashion verticals.
Post-demerger, Aditya Birla Lifestyle Brands Ltd. will retain ownership of Madura Fashion & Lifestyle and key labels such as Louis Philippe, Van Heusen, Peter England, Allen Solly, Reebok, American Eagle, and Van Heusen Innerwear. These segments contribute nearly 85 per cent of ABFRL’s overall revenue.
The parent company, ABFRL, will continue managing Pantaloons, TCNS Clothing’s ethnic wear labels, and high-end designer and luxury partnerships including Sabyasachi, Tarun Tahiliani, Masaba, Shantanu & Nikhil, Tasva, Jaypore, The Collective, and the upcoming Galeries Lafayette.
Management of the newly carved-out entity targets a compound annual growth rate (CAGR) of around 13 per cent in revenue over FY25-FY30. It also expects to expand EBITDA margins by 300 basis points to 11 per cent, with Return on Capital Employed (RoCE), excluding intangible assets, projected to surpass 70 per cent by FY30.
For the continuing ABFRL entity, a 20 per cent CAGR in revenue is forecast through FY30, alongside an EBITDA margin shift from negative to 7 per cent. RoCE for this entity is aimed at over 18 per cent by the end of the forecast period.
Brokerage firm Bernstein estimates the fair value of Aditya Birla Lifestyle Brands Ltd. to range between Rs 185 and Rs 215 per share. For ABFRL, post-demerger, the projected valuation stands between Rs 80 and Rs 105 per share.
This restructuring is seen as a move to unlock value by separating the high-growth lifestyle segment from the more diversified fashion portfolio.
