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Aditya Birla Fashion demerges lifestyle business, sets May 22 as record date
The demerged entity will house the company’s western wear legacy brands, growth brands like Reebok and American Eagle, and the Van Heusen innerwear business.
The newly formed entity, Aditya Birla Lifestyle Brands Ltd., will house some of the group's most prominent western wear and growth brands including Reebok, American Eagle, and Van Heusen innerwear.
Aditya Birla Fashion and Retail Ltd. (ABFRL) has officially announced the demerger of its lifestyle business into a new entity, Aditya Birla Lifestyle Brands Ltd.
The record date for the demerger is Thursday, May 22, meaning shareholders holding ABFRL shares at the close of trade on Wednesday will be eligible for the allotment.
Eligible shareholders will receive one share of the demerged entity for every one share held in Aditya Birla Fashion and Retail, according to a report by CNBC-TV18.
The newly formed entity, Aditya Birla Lifestyle Brands Ltd., will house some of the group's most prominent western wear and growth brands including Reebok, American Eagle, and Van Heusen innerwear, the report added.
Additionally, the entity will consolidate Madura Fashion & Lifestyle brands such as Louis Philippe, Van Heusen, Allen Solly, and Peter England - which together represent a substantial 85% of ABFRL's total revenue.
The existing listed entity, Aditya Birla Fashion and Retail, will retain other segments of the business including Pantaloons, TCNS Clothing's ethnic wear, and designer labels such as Sabyasachi, Tarun Tahiliani, Masaba, and Shantanu & Nikhil. The company will also continue to house premium and luxury ventures such as Tasva, Jaypore, and The Collective, along with the much-anticipated Galeries Lafayette launch.
From a growth outlook perspective, the management of Aditya Birla Lifestyle Brands Ltd. is aiming for a 13% revenue CAGR from FY25 to FY30. They are also targeting a 300 basis points increase in EBITDA margins to 11%, and RoCE (excluding intangibles) of over 70% by FY30, the report added.
On the other hand, the residual listed entity, Aditya Birla Fashion and Retail, is forecasting 20% revenue CAGR during the same period, along with a turnaround to a positive EBITDA margin of 7% and RoCE of over 18%.
According to brokerage firm Bernstein, the fair value of the demerged entity is projected to be in the range of ₹185–₹215, while the fair value of the remaining listed entity post-demerger is estimated at ₹80–₹105 per share.
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