Shares of Aditya Birla Fashion and Retail Ltd. adjusted on Thursday, as shares turned ex-date for demerger of its lifestyle brand—Aditya Birla Lifestyle Brands Ltd.
The demerger ratio was set at 1:1. As per the scheme, one fully paid-up share of face value of Rs 10 of Aditya Birla Lifestyle Brands will be given for every share held in the parent firm Aditya Birla Fashion And Retail.
The record date, which was set as May 22, will determine the eligible shareholders for the spin-off. The ex-date, which coincides with the record date, marks when the share price adjusts to reflect the split leading to the decline.
Aditya Birla Lifestyle Brands shares will be listed on both the NSE and the BSE and will trade as a completely standalone entity. The date of listing will be intimated by Aditya Birla Fashion and Retail later.
Following the demerger, the portfolio of Aditya Birla Lifestyle Brands will include lifestyle brands (Louis Phillippe, Van Heusen, Allen Solly and Peter England), casual wear (American Eagle and Forever 21), sportswear (Reebok) and innerwear business (under the Van Heusen brand).
Assets and liabilities will be divided between the two companies. Overall borrowings of Aditya Birla Fashion and Retail stood at Rs 3,000 crore as of March 31, 2024.
The approximate amount to be transferred to Aditya Birla Lifestyle Brands will be Rs 1,000 crore, and the rest will continue to stay with Aditya Birla Fashion and Retail. The company will raise Rs 2,500 crore in capital within 12 months after the completion of the demerger to make its balance sheet strong and fund its remaining business.
Aditya Birla Fashion and Retail Shares Decline
Shares of Aditya Birla Fashion and Retail fell over 67% to Rs 88.80 apiece, the lowest level since April 9. It pared losses to trade 66.82% lower at Rs 89.25 apiece, as of 10:20 a.m. This compares to a 0.87% decline in the NSE Nifty 50 Index.
It has fallen 12.96% in the last 12 months and 12.95% year-to-date. Total traded volume so far in the day stood at 13 times its 30-day average. The relative strength index was at 38.7.
Out of 23 analysts tracking the company, seven maintain a 'buy' rating, nine recommend a 'hold' and seven suggest 'sell', according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 11.9%.
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