Shares of Aditya Birla Fashion and Retail Limited (ABFRL) were trading in the green and 3% higher on 22 April after the board approved the demerger of Mudra Fashion and Lifestyle. 

In its regulatory filing, the company said that the Board of Directors of the company considered and approved the proposal for vertical demerger of Mudra Fashion and Lifestyle business into a newly incorporated business by the name of Aditya Birla Lifestyle Brands Ltd, which will be separately listed after the completion of the demerger. 

The filing added, “The demerger is expected to unlock significant value for the shareholders of ABFRL as each of the listed entities will have their own distinct capital structures, independent growth trajectories and value creation opportunities.”

After the completion of the demerger, the shareholders of the company will receive one share of the newly listed Aditya Birla Lifestyle Brands Ltd for every share held in ABFRL. 

The Aditya Birla Lifestyle Brands Ltd will house the business consisting of- 

• Lifestyle brands – Louis Phillippe, Van Heusen, Allen Solly, and Peter England.
• Casual wear brands – American Eagle & Forever 21.
• Sportswear brand – Reebok.
• Innerwear business – Van Heusen.

Aditya Birla Fashion and Retail Limited’s portfolio will consist of-

• Value retail – Pantaloons and Style Up.
• Ethnic Portfolio – TCNS brands.
• Luxury – The Collective, Galeries Lafayette, and select luxury brands.
• Digital brands – TMRW.

Within 12 months post-demerger, the company is also planning to raise Rs 2,500 crore to strengthen its balance sheet and fund the growth of the remaining businesses.

At 11:54 am, the shares of Aditya Birla Fashion were trading 3.33% higher at Rs 239.25 on NSE.