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Aditya Birla Fashion-Flipkart deal: What it means for the 2 companies

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Ankur Bisen of Technopak Advisors, Abneesh Roy of Edelweiss, Vaishnavi Mandhaniya of Anand Rathi Financial Services shared their insights on what it meants for both Flipkart as well as ABFRL in an interview with CNBC-TV18.

Walmart owned Flipkart is going to buy a minority stake in Aditya Birla’s Fashion Retail (ABFRL) for Rs 1,500 crore.
Ankur Bisen of Technopak Advisors, Abneesh Roy of Edelweiss, Vaishnavi Mandhaniya of Anand Rathi Financial Services shared their insights on what it meants for both Flipkart as well as ABFRL in an interview with CNBC-TV18.
It is a great deal in the context of how retail and fashion retail has changed in the post-COVID world, said Bisen. “This omnichannel as a reality is now, and here to stay for both e-commerce retailers and brick retailers,” he said.
ABFRL has got some solid brands, a great legacy, it is one of the largest men’s fashion retailer in fashion, and so the deal is a win-win deal for both ABFRL and Flipkart, said Bisen.
“We see significant rerating. ABFRL has one of the highest debt-to-equity ratio in this space and my sense is in the next one year, it will become almost net debt-free,” said Roy.
“Reliance will be relevant in every retail format, second will be Amazon and third will be Flipkart and fourth will be Tata. So all other brands would need to realign themselves otherwise it will become very tough for them to survive. ABFRL gains from here. I would see much higher chances of succession,” Roy said.
Mandhaniya sees a lot of scope for online growth. “The deal will win. However that is more of a longer-term view that will play out. In the short-term, the debt reduction will take place for them on a more immediate basis which will lead to a rerating,” she said.

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