Aditya Birla Fashion and Retail Limited on Tuesday approved the raising of up to Rs 2195 crore by way of preferential issue of equity and warrants to an affiliate of GIC, Singapore’s sovereign wealth fund.

GIC will invest Rs 770 crore towards subscription of equity and warrants, followed by up to Rs 1425 crore in one or more tranches within 18 months upon exercise of warrants. Post the entire investment, GIC will own around 7.5% equity stake in ABFRL while Aditya Birla Group will hold about a 51.9% stake in the company post the completion of this transaction.

ABFRL said it plans to use this capital to accelerate its growth engine built around the strength of its current businesses along with a rapidly evolving play in emerging high-growth business models.

“Indian apparel industry is set for robust long-term growth due to strong fundamentals of a large and growing middle class, favourable demographics, rising disposable incomes and aspiration for brands. ABFRL has become one of the leading players in this market through its diversified portfolio of strong brands, wide distribution and an established business model and is well positioned to benefit from this opportunity. An investment of this nature serves to underscore ABFRL’s strong position and dynamic growth model," Kumar Mangalam Birla, Chairman Aditya Birla Group said.

With revenue of Rs 8,136 crore spanning retail space of 9.2 million sq. ft, ABFRL sells clothes and accessories of brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England.

Choo Yong Cheen, Chief Investment Officer of Private Equity for GIC said, “ABFRL has a strong track record of building brands and its new business lines, including innerwear and ethnic wear, have strong structural tailwinds. We are confident that the company is well-positioned to continue its transformational journey into a future-ready consumer company powered by the growth of India”.