Traders' body CAIT has objected to Aditya Birla Fashion and Retail's (ABFRL) plans of raising Rs 1,500 crore by issuing 7.8 per cent stake to Walmart-owned Flipkart Group, alleging that the proposed deal violates the government's FDI policy. CAIT has written to commerce minister urging him to stop ABFRL from directly or indirectly selling inventory on the marketplace platforms owned/controlled by the Flipkart Group.
It also requested the minister not to 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. ABFRL board had approved the sale last week. Proceeds from the sale will be used to strengthen the company’s balance sheet and accelerate its growth trajectory.
The company has 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.