Future Lifestyle Fashions (FLF) has informed the stock exchanges that it plans to raise Rs 4.50 billion by unlocking value in its stake in its investee brands portfolio.

Over the years, ELF invested in multiple fashion brands backed by talented designers and entrepreneurs at early stage. ELF acquired stakes ranging from minority to majority in these brands. FLF believes that each of these brands hold significant value and has immense potential in become leading brands in their respective segments.

In line with FLF's stated intent of creating value by monetizing it's holding in these companies, FLF has (post shareholders' approval on March 24, 2017) transferred its holding in these investee brands into a wholly owned subsidiary FLFL Lifestyle Brands (FLBL). Post the transaction, FLF will hold 49% equity stake in FLFL Lifestyle Brands Limited. These investee companies will continue to be run independently by their respective entrepreneurs and professionals.

Given the fact that most of these brands are in their early stages of growth, the opportunity to unlock the true potential value from these investments is still a couple of year away. This transaction enables FLF to create value today by partially unlocking value in its stake.

This transaction is intended at adding further value for its shareholders by reducing FLF's debt. Along with this, a small portion of these funds will also be utilized to nurture and grow these brands. As these investments mature, there is still further significant value creation potential for both FLF and the Investors by monetizing the stakes in these entities in later years. ELF has successfully demonstrated such value creation in 2013 when it sold its stake in brands like AND and BIBA for an aggregate consideration of Rs 3.80 billion.