On May 22, 2025, shares of Aditya Birla Fashion and Retail Ltd (ABFRL) experienced a sharp decline of approximately 67%, dropping from ₹269.15 to ₹88.80 on the National Stock Exchange (NSE). This significant drop coincided with the record date for the demerger of its Madura Fashion & Lifestyle (MFL) business into a separate listed entity.
The apparent steep fall in ABFRL’s share price reflects the corporate restructuring rather than a loss in overall company value. Investors will receive shares in the new entity, balancing the dip in ABFRL’s valuation post-demerger. This demerger strategy aims to create two focused entities:
Aditya Birla Fashion and Retail Ltd (ABFRL): Continuing as the main company.
Aditya Birla Lifestyle Brands Limited (ABLBL): A new, separately listed company housing well-known labels like Louis Philippe, Van Heusen, Allen Solly, and Peter England.
Existing ABFRL shareholders will receive shares of ABLBL at a 1:1 ratio, meaning for every one share held in ABFRL, they will receive one share of the new company. Therefore, the sharp decline in ABFRL's share price is a technical adjustment due to the demerger and not indicative of any fundamental issues with the company.
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