The demerger of Aditya Birla Fashion and Retail’s (ABFRL) lifestyle division into Aditya Birla Lifestyle Brands has been formally reported.

Shareholders who owned ABFRL shares at the end of trading on Wednesday will be eligible for the allotment since the demerger’s record date is Thursday, May 22.

According to a report, eligible shareholders will receive one share of the demerged company for each share they own in Aditya Birla Fashion and Retail.

Some of the group’s most well-known Western clothing and emerging brands, such as Reebok, American Eagle, and Van Heusen innerwear, would be housed under the recently established Aditya Birla Lifestyle Brands.

The company will also combine Madura Fashion & Lifestyle brands, which collectively account for a significant 85 per cent of ABFRL’s total income. These brands include Louis Philippe, Van Heusen, Allen Solly, and Peter England.

Other business sectors, such as Pantaloons, TCNS Clothing’s ethnic wear, and designer labels like Sabyasachi, Tarun Tahiliani, Masaba, and Shantanu & Nikhil, will continue to be operated under the current listed company, Aditya Birla Fashion and Retail. Along with the much-awaited opening of Galeries Lafayette, the company will also continue to house high-end and luxury ventures like Tasva, Jaypore, and The Collective.

The management of Aditya Birla Lifestyle Brands is targeting a 13 per cent revenue CAGR from FY25 to FY30 from the standpoint of growth forecast. According to the report, they also want to raise EBITDA margins by 300 basis points to 11 per cent and achieve a RoCE (excluding intangibles) of more than 70 per cent by FY30.

Conversely, Aditya Birla Fashion and Retail, the remaining public company, is projecting a 20 per cent revenue CAGR over the same time frame, as well as a turnaround to a positive EBITDA margin of 7 per cent and a RoCE of more than 18 per cent.

The broking firm Bernstein estimates that the demerged entity’s fair value will be between Rs 185 and Rs 215, while the surviving listed entity’s post-demerger fair value will be between Rs 80 and Rs 105 per share.