Aditya Birla shortlists PEs for stake-sale

As speculated earlier, sources assert that Aditya Birla Group has already short-listed French tycoon

Bernard Arnault's investment company L Capital, General Atlantic Partners, Singapore sovereign fund GIC and Standard Chartered Private Equity to raise 400 million dollars (around Rs 2,400 crores) funding for its consolidated retailing business unit. The Group plans to raise 200 million dollars (around Rs 1,200 crores) each from two investors in the coming weeks. The new retail company under the group is valued at 2.2 billion dollars (around Rs 13,000 crores).

The four investors are said to be in the process of completing due diligence process before the group finalizes on the eventual PEs. The chosen investors and their investment plan will be built into the scheme of merger being prepared for the three group companies. Madura is part of the listed Aditya Birla Nuvo, while Pantaloons is a listed company. More supermarkets are being planned under Aditya Birla Retail, which is privately owned by Chairman Kumar Mangalam Birla.

The restructuring is expected to see Madura getting subsidiarized from the listed Aditya Birla Nuvo with public shareholding. Pantaloons and More will be merged with the demerged Madura and the combined entity is expected to be led by Madura with a projected valuation of 1.5-1.8 billion dollars (over Rs 9,000 to 1,8,000 crores) with Pantaloons and More being the smaller businesses by value in the restructured retail company.

Aditya Birla Group entered fashion retail with the acquisition of Madura for Rs 236 crores in 1999. It entered food and grocery retail following the acquisition of Fabmall and Trinethra supermarkets in 2007 and The department store chain Pantaloons was acquired from Kishore Biyani's Future Group in 2012.

Aditya Birla Retail (ABRL) recently borrowed Rs 500 crores from Yes Bank to grow its food and grocery business. The company, in its recent filing with the Registrar of Companies, said it has issued non-convertible debentures to Yes Bank for the amount.