Flipkart Plans ₹582 Crore Exit from Aditya Birla Fashion Stake
| 2025-06-03
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Walmart-owned e-commerce firm to sell 6% holding in Indian retail company via block deal
Walmart-owned Flipkart is preparing to divest its entire 6% stake in Aditya Birla Fashion & Retail Ltd (ABFRL) through a block deal on Indian stock exchanges, targeting proceeds of at least ₹582 crore (approximately $70 million).
According to a term sheet reported by Bloomberg News, Flipkart Investments Pvt. Ltd., based in Singapore, has offered over 73 million shares in ABFRL for sale at a floor price of ₹79.5 per share. This marks a discount of about 7.6% from the company's most recent closing price of ₹86.06 on the Bombay Stock Exchange (BSE).
Multinational investment bank Goldman Sachs has been appointed as the sole bookrunner for the transaction.
The deal is expected to take place on Wednesday through open market block trades.
Strategic Exit Amid Changing Priorities
Flipkart Investments is registered as a Category II foreign portfolio investor in India. The proposed exit reflects a strategic move by the Walmart-owned firm, which has been restructuring its investment portfolio amid evolving priorities in India’s competitive retail sector.
Neither Flipkart nor ABFRL has issued a public statement regarding the rationale behind the divestment, but sources familiar with the matter suggest the exit is part of broader portfolio realignment.
ABFRL Looks to Turn Around Loss-Making Units
The planned stake sale comes as ABFRL focuses on reviving its financial performance. The company, part of the Aditya Birla Group conglomerate, has announced capital expenditure of ₹500 crore for the 2025 financial year. A significant portion of this spending is earmarked for overhauling loss-making subsidiaries including TCNS Clothing, Tasva, and TMRW, with a goal of turning them profitable by the next fiscal year.
Despite signs of improvement, the company continues to face financial headwinds. ABFRL reported a consolidated net loss of ₹23.55 crore in the quarter ending March 2025, a notable reduction from the ₹266.36 crore loss posted during the same quarter a year earlier. The company attributed some of the performance changes to the recent demerger of its Madura Fashion & Lifestyle business, which has affected year-on-year comparability.
Revenue from operations during the latest quarter rose to ₹1,719.48 crore, up from ₹1,575.12 crore in the same period last year. However, total expenses climbed to ₹1,959.53 crore. For the full financial year ending March 2025, ABFRL reported a net loss of ₹455.82 crore on operational revenues of ₹7,354.73 crore.
Segment-wise, Pantaloons contributed ₹884.60 crore in revenue, while the ethnic and other fashion divisions added ₹846.99 crore.
Market Reaction
Shares of ABFRL ended trading on Tuesday at ₹86.06, down 1.8% from the previous day, underperforming the broader Sensex index, which fell 0.8%. The stock has declined 3% over the past 12 months, although it has rebounded by approximately 25% since the beginning of 2025.
Wider Context: Indian Fashion Retail Faces Consumer Caution
The stake sale and capital restructuring come at a time of increased caution among Indian consumers, who are cutting back on discretionary spending amid concerns about inflation and economic uncertainty. The Indian fashion retail sector, particularly mid-market brands, has been under pressure as demand weakens and input costs remain high.
As one of India’s largest fashion retailers, ABFRL operates a portfolio that includes Pantaloons, Allen Solly, and other leading domestic and international brands. The company’s performance is closely watched as a bellwether for the broader retail and apparel sector in India.
Flipkart’s planned exit could influence investor sentiment around ABFRL, particularly if the block deal exerts downward pressure on the stock in the short term. However, the long-term impact will depend on how effectively ABFRL executes its turnaround plans and navigates the challenging retail landscape.
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