Flipkart Buys 7.8% Stake In Aditya Birla Fashion And Retail, Beats Amazon

Flipkart, an Indian E-Commerce giant, has recently acquired 7.8 % stake in the famous Aditya Birla fashion worth Rs. 1500 crores. As of April 2020, the Aditya Birla group has raised Rs. 2500 crores.

Aditya Birla fashion retail Limited have raised their equity capital at Rs. 205 per share.

Reports state how Amazon was also among the few to buy a stake in ABRL.

They are focused on building their plans with a strengthened balance sheet by using this capital.

Aditya Birla fashion retail limited has now a stake of 55.13% in the company. They are successfully running a chain of retail stores named Pantaloons.

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Kumar Mangalam Birla, chairman of Aditya Birla Group, during the announcement of their partnership with Flipkart mentioned how the growth potential of India will be highly affected in a positive manner after this endorsement.

It might also mirror a certainty in the future of the fashion and apparel industry within the country. It might touch $100 Billion in the next five years if the certainty is maintained.

A large number of middle-class families favor the brands that ABRL puts on display. Favorable conditions make it possible for people to afford quality apparel and so does the rapid technology infrastructure for the process.

Flipkart has invested Rs. 260 crore in July to buy an estimated 27% stake in Arvind Youth Brand’s subsidiary, Arvind fashions.

Arvind fashions own the Flying Machine, which might help Flipkart to strengthen its portfolio. In 2018, Amazon took the lead by acquiring the supermarket with private equity firm Samara Capital.

The company’s stock has risen to 4.3 % on the Bombay Stock Exchange (BSE).

Amazon was busy ramping up their presence with the launch of their private brands while Flipkart was busy with dealings and partnerships with designers to provide a better and premium segment to their customers.

ABRL, with its Pantaloons chain which owned brands like Allen Solly, is successfully running their platform. In the first quarter of the year, they suffered a loss of  Rs. 410.3 64 compared to the profit of Rs. 20 1.56 previous year, during the same quarter.

To keep them from the losses they are digging into the online offerings and consider e-commerce as an aggressively better platform for introduction to their offerings.

With this partnership they are confident to bring their products through e-commerce platforms Flipkart and 7 considering their ethnic wears, innerwear, casual wears and other categories as the high growth for the company.

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Kritika
Student with ambitions, writer with ideas.
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