Aditya Birla Fashion and Retail Ltd (ABFRL) witnessed a sharp decline in its stock price on May 22, falling 66.88% to Rs 89.15, as the stock turned ex-demerger following the long-awaited spin-off of its lifestyle brands business into a newly listed entity — Aditya Birla Lifestyle Brands Ltd (ABLBL).
The steep fall reflects the market’s adjustment to the removal of the lifestyle vertical’s value from ABFRL’s books. In line with the approved 1:1 share entitlement ratio, existing ABFRL shareholders will receive one share of ABLBL for every share of ABFRL held. The ex-date and record date for this restructuring were both set as May 22, 2025.
What Changes Post-Demerger?
Following the ABFRL lifestyle demerger, the parent company will retain focus on:
- Value retail through Pantaloons and Style Up
- Ethnic wear including TCNS Clothing and designer-led brands
- Luxury and bridge-to-luxury through The Collective and Galeries Lafayette
- Premium international labels and digital-first brands under the TMRW platform
Meanwhile, ABLBL will house ABFRL’s flagship lifestyle portfolio, including:
- Louis Phillippe, Van Heusen, Allen Solly, and Peter England
- Youth-focused and casualwear brands like American Eagle and Forever 21
- The Reebok sportswear business
- The Van Heusen innerwear division
Financial Impact of the Demerger
As part of the restructuring, Rs 1,000 crore of debt has been transferred from ABFRL to ABLBL. ABFRL will retain Rs 2,000 crore in liabilities from its original Rs 3,000 crore debt as of March 31, 2024.
Despite the restructuring, ABFRL’s Q3 FY24 performance showed a net loss of Rs 51.31 crore, an improvement from Rs 77.87 crore loss in Q3 FY23. Net sales rose 3.31% YoY to Rs 4,304.69 crore during the same period.
Market Outlook
The ABFRL lifestyle demerger is part of the group’s strategy to unlock value by creating focused verticals. Analysts will now be closely watching the market performance of both ABFRL and ABLBL as independent entities in India’s growing fashion and retail sector.