Flipkart is set to offload its entire 6% stake in Aditya Birla Lifestyle Brands Ltd. (ABLBL) through a block deal, as per term sheet seen by NDTV Profit.
The transaction will involve the sale of approximately 7.3 crore shares at a base price of Rs 130, representing a discount of up to 4.73% on ABLBL's last closing price of Rs 136.45 on the National Stock Exchange, as of Oct. 3.
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This will mark one of the biggest exits from a private investor from a domestic retail company in recent times. Flipkart had invested in Aditya Birla Fashion in 2020.
The exit is part of the company's realignment strategy as the Walmart-owned e-commerce giant looks to calibrate its business in India.
It must be noted that Aditya Birla Lifestyle Brands demerged from Aditya Birla Fashion earlier this year. The demerged entity houses the Madura fashion and the lifestyle business, which includes the likes of Van Heusen and Louis Philippe.
ABLBL, in fact, is one of India's largest branded apparel players, with a portfolio that also includes Allen Solly, in addition to Van Heusen and Louis Philippe.
Flipkart is carrying out the sale as a clean-up trade, meaning there will be no lock-up period on its remaining holdings.
Flipkart's exit from the company comes at a time when Aditya Birla's fashion arm is looking to expand further into the luxury segment, which has historically given higher margins.
With the GST rate cuts now live, the company will be hoping to capitalise on the increased spending to boost sales heading into the second half of the ongoing fiscal year.
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