Kumar Mangalam Birla and family are investing Rs 500 crore in food and grocery biz

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Kumar Mangalam Birla and family are investing Rs 500 crore in food and grocery biz
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Kumar Mangalam Birla and his family are planning to invest Rs 500 crore in the food and grocery business owned by the Aditya Birla Group, so that its authorised capital is increased to Rs 750 crore.

Aditya Birla Retail Limited (ABRL) has passed a board resolution that allows shares to be issued 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. These details were revealed by the privately-held company in a filing with the Registrar of Companies.

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"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. With the additional capital, the company will be able to meet its capital expenditure needs while also handling 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," Pranab Barua, business director for apparel and retail business at Aditya Birla Group, told ET.
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ABRL is the fourth largest supermarket chain in India, featuring in the list after Future Group, Reliance Retail and D'Mart. As of now, the authorised capital is Rs 390 crore, from which it is being planned to be increased to Rs 750 crore.

Since its inception over 9 years ago, ABRL has seen losses of Rs 5,320 crore; however, for the year ended March 2015, the losses were reduced by 5% and brought down to Rs 571 crore.

The reason behind this is said to be their strategy of focusing on profitable markets.

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