Aditya Birla Fashion Shares Plunge 67% in an Hour—And Apparently,
In a nearly comically dramatic gesture, Aditya Birla Fashion and Retail Ltd. (ABFRL) watched its shares plummet a mind-boggling 67% in less than 60 minutes on May 22, 2025. For any ordinary company, that would be an indication of disaster. For ABFRL, it was a “planned” action. Yes, you heard correctly—they actually want you to believe that this financial cliff dive is nothing to worry about.
So, what went down? Let’s get into this fashion mess.
67% Went Poof Like a Bargin Basement Deal: The "Absolutely Not a Crisis" Explanation
Aditya Birla Fashion Shares – Management and its apologists want you to believe this was not a debacle, but a “technical adjustment.” You see, ABFRL was kind enough to halve itself by demerging its most prized division—Madura Fashion & Lifestyle (MFL)—into a new company. And we’re all magically supposed to applaud.
MFL boasts big guns such as Van Heusen, Louis Philippe, Allen Solly, and Peter England—names that generate money. This segment alone contributed 60% of ABFRL’s revenues and 75% of its profits. Of course, once you take that out of the picture, the rest of the company isn’t worth much. Therefore, the 67% drop.
But hey—investors receive one share in the new firm per every ABFRL share they own. So technically, the value’s still there. if you’re a believer in stock market fairy tales.
The Genius Strategy: Let's Break Our Legs to Run Faster
Aditya Birla Fashion Shares -This demerger seems to be planned. ABFRL wishes to give MFL independence so that it can concentrate on other jewels such as Pantaloons and its increasing array of miscellaneous acquisitions. It’s akin to selling your Ferrari so that you can concentrate on washing your bicycle.
But sure, the firm claims this is a long-term plan, and not short-term panic. Perhaps one day it’ll all become clear. Or perhaps they’re simply praying you forget they just made a load of cash disappear.
The Cold, Ugly Numbers: Debt, Losses & More
Let’s discuss facts: About Aditya Birla Fashion Shares
ABFRL reported a ₹215 crore loss in Q1 FY25.
Its debt swelled to ₹2,100 crore from ₹1,400 crore in mere three months.
It spent ₹2,900 crore to buy a controlling stake in TCNS Clothing—another brilliant move when you’re already sinking.
You’d think these numbers would raise alarms, but some analysts are still playing cheerleader, insisting everything will be okay eventually. Hope is a beautiful thing. until the bills come due.
Analysts: A Mixed Bag of Delusion and Denial
While Kotak Securities had the temerity to call a spade a spade, tagging the stock with a ‘reduce’ rating and issuing a warning about its addiction to debt, others continue to hold on to hope. Nuvama Institutional Equities even hiked their target price—because apparently, losing your best division and bleeding cash is now a sign of bullishness.
Perhaps they know something we don’t. Or perhaps they’re just sporting very pricey blindfolds.
Conclusion: A "Strategic" Free Fall
ABFRL’s 67% freefall isn’t random—it’s a fiscal wake-up call. It has lost its crown jewel, incurred enormous debt, and holds on to nebulous strategies while shareholders see their value disappear.
But don’t worry—they assure it’s part of the plan.
1. Why have Aditya Birla Fashion shares plummeted 67% in one hour?
Because they cleverly chose to demerge their most lucrative business—Madura Fashion & Lifestyle—leaving with them a weaker entity which the market immediately priced accordingly.
2. Is this fall permanent or will the share price bounce back?
Unless there’s a miracle wardrobe switcheroo behind the scenes, the drop is the reality check. How well the leftovers do will determine recovery. Spoiler: it will not be pretty.
3. Will shareholders be out of pocket after the demerger?
Not necessarily—on paper. They receive shares in the new entity (MFL). But if either half does well enough to restore investor confidence, that’s another fashion show altogether.
4. Why is the company referring to this as a “strategic move”?
Because “we just broke up our business and wrecked our valuation” doesn’t really sound terrific in press releases. So, it’s being pitched as a visionary restructuring.
5. Do I buy, sell, or hold ABFRL today?
If you enjoy high-risk melodrama with volatile storylines, perhaps hold. Otherwise, wait for the dust (and hype) to settle and see if either company can actually deliver on their promises.
