As per top company officials, Aditya Birla Fashion would seek between 7 00 and 800 Crore in
debt in order to help finance the acquisition of TCNs clothing.
“For funding, we’ll need to raise 700 to 800 Crore through an external loan”, said Ashish Dikshit, Managing Director of ABFRL told ET. “We can raise the amount as our Balance sheet is enough strong”, further he added.
ABFRL announced a deal on Friday, where they would buy a 51% stake in TCNS which owns women’s ethnic clothing including W, Aurelia, and Elleven, for Rs. 1650 Crore.
According to the deal, ABFRL will make an open conditional offer to purchase up to 29% of shares from the public shareholder at Rs.503 per share. The purchase of the remaining shares would be done from founder promoters.
As per Antique Stock Broking, the retail store of women’s wear will rise by 31% in FY20 to 355 by FY25.
Also, women’s ethnic wear is not present in international retailers such as H&M and Zara, therefore, Indian retailers have a great opportunity they can dominate the market worldwide in this segment.
With this acquisition, ABFRL’s ethnic wear clothing is anticipated to cross 5000 crores in the upcoming three years.
Five years ago, ABFRL segmented its business into 6 subcategories- youth fashion, Pantaloon, lifestyle, super-premium, athleisure, and ethnic.
The company invested in the designer brand Shantanu & Nikhil, Sabyasachi, Masaba, and Tarun Tahiliani along with some fabulous premium craft-based artisanal brands in the ethnic segment.
“With this acquisition, our portfolio that we started 5 years ago is completed now “, said Dikshit.