Flipkart Sells Stake in Aditya Birla Lifestyle Brands in INR 950 Cr Block Deal

Through a block sale valued at INR 950 Cr (about $114 million), Flipkart Investments, the investment vehicle of the e-commerce powerhouse Flipkart, is reportedly diluting its whole 6% stake in Aditya Birla Lifestyle Brands Ltd (ABLBL).

Flipkart plans to sell 7.3 Cr shares at a base price of INR 130 per, according to a CNBC Awaaz report. Notably, in 2020, Flipkart Investments invested INR 1,500 Cr to purchase a 7.8% stake in Aditya Birla Fashion and Retail Ltd (ABFRL).

How ABLBL was Created?

ABLBL was created following the vertical demerger of western clothing brands from ABFRL into a newly formed company inside Madura Fashion and Lifestyle. ABLBL’s portfolio includes lifestyle brands such as Simon Carter, Van Heusen, Allen Solly, Peter England, and Louis Philippe.

It also includes American Eagle, Van Heusen’s innerwear division, and Reebok’s sportswear division in its portfolio. To support its digital house of brands initiative, TMRW, ABFRL is raising INR 437 Cr in its first external fundraising round.

When TMRW was introduced in 2022, ABFRL stated that it will either acquire or incubate 30 fashion and lifestyle companies by 2025 in its portfolio. D2C startups Bewakoof, The Indian Garage Co., Wrogn, Urbano, and Nobero are currently part of TMRW’s portfolio.

Flipkart Aiming for an IPO

The equity sale for Flipkart coincides with the e-commerce behemoth’s preparations for its initial public offering. The company is already relocating its headquarters from Singapore to India as part of this, and it anticipates finishing the reverse flip in a few months.

In terms of finances, Flipkart Internet, its B2C division, surpassed the INR 20,000 Cr revenue milestone in FY25. From INR 17,907 Cr in FY24 to INR 20,493 Cr in FY25, its operating revenue increased 14.4%. In the meantime, it was able to reduce its loss from INR 2,359 Cr in FY24 to INR 1,494 Cr in the year under review, a 37% reduction. Flipkart’s larger plan to reassess its investments in India’s retail industry includes this sale.

In 2020, Flipkart first made an investment in ABFRL to bolster its omni-channel retail capabilities in the fashion and lifestyle sectors. Flipkart’s ownership is anticipated to fall below 3% following the transaction, indicating a significant reversal from its previous position.