Investors seemed to have welcomed the consolidation in the Aditya Birla Group, as the Aditya Birla Nuvo shares surged to a high of Rs 1,780.95 or about nine per cent in initial trading on the BSE on Monday.
Pantaloon Fashion shares jumped 20 per cent to Rs 136.60. Currently, the shares of AB Nuvo is hovering around Rs 1,678.78.
Aditya Birla Group has consolidated its fashion retail business under Pantaloon Fashion and Retail Post and the latter has been rechristened as Aditya Birla Fashion and Retail.
As part of the reorganisation, Aditya Birla Nuvo will spin off its wholly-owned subsidiary, Madura Garments Lifestyle Retail Company, to merge it with the new entity, which will have a combined turnover of Rs 5,290 crore.
Investors of Aditya Birla Nuvo will get 26 shares of Aditya Birla Fashion and Retail for every 5 shares they currently hold, while investors of Madura Garments will get 7 shares of the new company for every 500 shares they hold now.
Post the transaction, ABG, the holding company will own a 56.1 per cent stake in the new entity; Aditya Birla Nuvo will have 9.06 per cent; and public holding will be 39.84 per cent. ABG currently owns 58 per cent in Aditya Birla Nuvo.
Kumar Mangalam Birla, Chairman of ABG, said the realignment would create the largest pure play fashion and lifestyle company with a presence in each and every price point.
“Investors of Aditya Birla Nuvo have been demanding for consolidation of the retail business for long. Now that we have fulfilled their wish, it shows that we not only listen to our investors but also carry out their plans,” he said.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.