Flipkart Sells Entire Stake in ABFRL via Block Deal, Stock Falls Over 11% to One-Year Low

KKN Gurugram Desk | Shares of Aditya Birla Fashion and Retail Limited (ABFRL) took a severe hit on Wednesday after a massive block deal involving approximately 2 million shares sent the stock plunging by over 11% during intraday trading on the Bombay Stock Exchange (BSE). The reason behind this sudden selloff? Walmart-owned Flipkart offloaded its entire 6% stake in the company, worth an estimated ₹600 crore.

 ABFRL Stock Price Drops to One-Year Low

The heavy selling pressure during the pre-open block deal window saw the ABFRL stock price crash from previous levels, touching an intraday low of ₹76.10, down 11.49% from the previous close. Later, it recovered slightly but still ended the session with a sharp 9.20% fall, closing at ₹78.07 per share.

This is the lowest level the stock has traded at in the past 12 months, indicating a strong negative market reaction to Flipkart’s exit.

 Why Did Flipkart Sell Its Entire Stake in ABFRL?

According to media reports, Flipkart had been planning to divest its 6% stake in ABFRL through a block deal mechanism. The floor price for the transaction was set at ₹80 per share, which itself indicated a discount to prevailing market rates — a common strategy used in bulk or block deals to attract buyers for large volumes.

Though Flipkart or Walmart have not officially commented on the exact rationale, analysts suggest this could be part of a strategic portfolio reshuffle or a move to focus on core e-commerce operations in India. Flipkart originally acquired the stake in ABFRL in 2020 as part of a partnership to enhance omni-channel capabilities in fashion retail.

 Key Details of the Block Deal

• Volume: ~2 million shares

• Seller: Flipkart (Walmart-backed)

• Estimated Value: ₹600 crore

• Floor Price: ₹80 per share

• Stock Movement:

  • Intraday Low: ₹76.10

  • Close Price: ₹78.07

  • Intraday Fall: -11.49%

  • Closing Loss: -9.20%

While the exact identity of the buyer(s) in this deal has not been disclosed, institutional players are likely to have taken part, given the size and structure of the transaction.

 About ABFRL (Aditya Birla Fashion and Retail)

ABFRL is part of the Aditya Birla Group and owns prominent fashion brands such as:

• Pantaloons

• Van Heusen

• Allen Solly

• Peter England

• Louis Philippe

• Along with partnerships with global brands and designer labels.

The company has positioned itself as a leader in Indian fashion retail, both in online and offline segments.

How Will This Impact ABFRL’s Future?

The short-term impact of such a selloff is often psychological. It can dent investor confidence, particularly when a reputed shareholder like Flipkart exits the company.

However, many analysts view Flipkart’s exit as non-fundamental — meaning it does not necessarily reflect a negative outlook for ABFRL’s core business. If ABFRL can maintain its growth momentum in branded apparel and e-commerce integration, the stock could rebound once the overhang of this large deal fades.

That said, the sharp drop highlights how sensitive mid-cap stocks are to institutional exits.

 Market Reaction & Investor Sentiment

Market participants reacted swiftly to the news of the block deal, with retail investors and short-term traders offloading positions, fearing further downside. The absence of any official comment from ABFRL management or Flipkart has also added to the uncertainty.

Some brokerages have revised their near-term rating on ABFRL to “Neutral” from “Buy,” suggesting that clarity on strategic plans or any new partnerships will be crucial to restoring momentum.

 Expert View

Ramesh Shah, senior equity analyst at a leading Mumbai-based brokerage, commented:

“Such block deals are common in capital markets, but when a large player like Flipkart exits in one go, it tends to trigger panic. The fundamentals of ABFRL remain solid with strong brand equity. Investors with a long-term view could see this as a buying opportunity after the dust settles.”

Regulatory Observations

The deal has been executed through proper block deal mechanisms, and the exchange has not flagged any compliance issue so far. SEBI guidelines require such large transactions to maintain market transparency and price discovery fairness.

 ABFRL’s Recent Performance and Challenges

ABFRL has faced both tailwinds and headwinds in the past year:

Positives:

• Continued expansion in Tier 2 and Tier 3 cities.

• Growth in ethnic wear and premium categories.

• Improving online sales through own channels and marketplaces.

Challenges:

• Slowing discretionary consumption.

• Intense competition from fast fashion brands and D2C labels.

• Margin pressures amid rising input and logistics costs.

With Flipkart now out of the shareholding structure, the company may consider alternative funding strategies or explore new strategic tie-ups.

The Flipkart-ABFRL block deal may have dented the stock in the short term, but long-term fundamentals and brand value remain intact. Analysts advise caution but also note that the dip could offer value-based entry points for those confident in the fashion retail growth story in India.

If you are already invested in ABFRL, it may be wise to hold and monitor management commentary in the coming weeks. For new investors, wait for stability in price action before considering fresh exposure.