“The issuance and allotment for shares up to Rs 500 crore will be in one or more tranches within a period of twelve months,” the filing said.
MUMBAI: Aditya Birla Group chairman Kumar Mangalam Birla and his family plan to invest Rs 500 crore in the group’s food and grocery business and increase its authorised capital to Rs 750 crore.
Aditya Birla Retail (ABRL) has passed a board resolution to issue shares on a preferential basis to either Kanishtha Finance & Investment or RKN Retail, promoted by Birla, his family and some closely-held companies of the family, the privately-held company said in a filing with the Registrar of Companies.
“The issuance and allotment for shares up to Rs 500 crore will be in one or more tranches within a period of twelve months,” the filing said. The additional capital will help the company meet its capital expenditure needs and refinance some of its debt. “The board resolution was related to an enabling provision to allow the company increase the authorised capital to meet its general corporate expenses in the ordinary course of business and also to refinance its existing debt portfolio,” said Pranab Barua, business director for apparel and retail business at Aditya Birla Group.
ABRL the fourth largest supermarket chain in the country after Future Group, Reliance Retail and D’Mart has decided to increase its authorised capital to Rs 750 crore from Rs 390 crore now.
It has accumulated losses of Rs 5,320 crore since inception over 9 years ago. For the year ended March 2015, it managed to reduce its losses by 5% at Rs 571 crore. The company posted Rs 2,893 crore sales for 2014-15 and ended the year with 482 ‘More’ branded supermarkets and 16 hypermarkets, covering about 2 million square feet of retail space.
Experts said ABRL’s strategy of focusing on profitable markets has helped it cut losses.
“It would be interesting to see if they are able to create promising brand image by streamlining and standardising their procedures amid existing competition. Supermarket business has lot of potential and further investment can give them competitive advantage,” said Ruchi Sally, director, retail consultancy Elargir Solutions.