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.
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.
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.
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.
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.
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 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.
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.”
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 has faced both tailwinds and headwinds in the past year:
Continued expansion in Tier 2 and Tier 3 cities.
Growth in ethnic wear and premium categories.
Improving online sales through own channels and marketplaces.
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.
In a significant development for the healthcare infrastructure in Bihar, Prime Minister Narendra Modi virtually… Read More
Mumbai Police recently uncovered a major cyber fraud racket that has been operating across the… Read More
In recent years, the concept of manifestation has gained massive popularity. Social media platforms are… Read More
Uttar Pradesh Congress President Ajay Rai has urged the Union Home Minister Amit Shah to… Read More
Animal rights activist and BJP leader Maneka Gandhi has welcomed the recent Supreme Court decision… Read More
Tamil cinema superstar and Tamilaga Vetri Kazhagam (TVK) chief Vijay has officially announced that he… Read More