Flipkart to invest over $200m for a stake in Aditya Birla’s fashion retail arm

Indian ecommerce company Flipkart Group will invest 1,500 crore rupee (US$203.9 million) to acquire a 7.8% stake in Aditya Birla Fashion and Retail Limited (ABFRL), a fashion and lifestyle company in India with over 3,000 stores.

Photo credit: moovstock / 123RF Stock Photo.

ABFRL plans to use the fresh funds to strengthen its balance sheet and accelerate its growth trajectory. It will scale its existing businesses while increasing presence in categories such as innerwear, athleisure, casual wear, and ethnic wear, according to a statement.

The company said that with the deal, it has raised a total of 2,500 crore rupee (US$339.6 million) since April this year.

With the partnership, Flipkart will also distribute ABFRL’s products on its platform. “Through this transaction with ABFRL, we will work toward making available a wide range of products for fashion-conscious consumers across different retail formats across the country,” said Flipkart Group CEO Kalyan Krishnamurthy.

The Walmart-owned startup goes up against US ecommerce giant Amazon and local player Reliance Retail, which acquired Future Group’s retail and wholesale business as well as its logistics and warehousing arm in a US$3.4 billion deal in August.

ABFRL chairman Kumar Mangalam Birla claims that the apparel industry in India is poised to reach US$100 billion in the next five years.

Currency converted from Indian rupee to US dollar: US$1 = 73.55 rupee.