ABFRL shares surged by 17% on Tuesday morning as the company unveiled plans to demerge its fast fashion and retail business into a separate listed entity. The demerger, involving Madura Fashion & Lifestyle (MFL), which oversees brands like Louis Philippe, Van Heusen, Allen Solly, and Peter England, aims to unlock potential for value creation. Additionally, MFL manages casual wear brands such as American Eagle and Forever 21.
The stock soared by 16.86% to Rs 247.40 on the BSE and by 16.93% to Rs 247.50 on the NSE in response to the announcement. This move follows the ABFRL board’s authorization for the company’s management to explore the vertical demerger of the Madura Fashion & Lifestyle business.
ABFRL highlighted that the proposed demerger will result in the formation of two separate listed companies, each acting as independent growth engines with distinct capital structures and avenues for value creation. The company further noted its intention to bolster its balance sheet and pursue significant growth opportunities within a year following the demerger.
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