ABFRL sheds 4% on alleged FDI violation in Flipkart deal

NEW DELHI: Shares of Aditya Birla Fashion and Retail (ABFRL) declined 4.45 per cent in Wednesday's trade after the traders' body CAIT raised objections over the company's plans to raise Rs 1,500 crore by issuing 7.8 per cent stake to Walmart-owned Flipkart Group. The body alleged that the proposed deal violates the government's FDI policy, PTI reported.

The Confederation of All India Traders (CAIT) wrote to Commerce Minister Piyush Goyal in this regard urging him to prohibit ABFRL from directly or indirectly selling its inventory on the marketplace platforms owned/controlled by the Flipkart Group.

It also requested the minister "to not allow the proposed FDI unless they undertake that ABFRL will not be selling its inventory through any of the marketplace platforms owned/controlled by Walmart-owned Flipkart Group".

Following the development, the stock fell 4.45 per cent to hit a low of Rs 157.70 on the BSE.

Last week, ABFRL said its board approved the proposed stake sale.

ABFRL said it plans to use this capital to strengthen its balance sheet and accelerate its growth trajectory. It also entered into a commercial agreement in relation to the sale and distribution of its various brands. The transaction is subject to regulatory and other customary approvals.