Adds details, comments, share move
BENGALURU, Oct 23 (Reuters) - Walmart Inc's WMT.NS Flipkart will buy a 7.8% stake in India's Aditya Birla Fashion and Retail Ltd ADIA.NS for 15 billion rupees ($204 million), the fashion retail company said, sending its shares up 6% on Friday.
The investment comes at a time when Amazon.com Inc AMZN.O, billionaire Mukesh Ambani-led Reliance Industries RELI.NS and Flipkart are in a race to gain market share in India's fast-growing online market for food and groceries.
"Fashion retail in India is set for robust long-term growth due to strong fundamentals of a large and growing middle class... Rapid growth of technology infrastructure will further accelerate this process," Aditya Birla Group Chairman Kumar Mangalam Birla said.
With the COVID-19 pandemic keeping most people indoors, Indians are turning to online platforms for all purchases from bread to phones to clothes.
Media reports had said both Amazon and Flipkart were in the race to pick a stake in Aditya Birla Fashion and Retail, which owns and operates the Pantaloons retail chain and owns rights to sell Forever 21 merchandise in India.
Aditya Birla said it would use the money to strengthen its balance sheet as it scales up its businesses.
Shares of Aditya Birla Fashion and Retail surged as much as 6.5% to 163.45 rupees, their highest since March 30.
($1 = 73.6100 Indian rupees)
(Reporting by Chandini Monnappa in Bengaluru; Editing by Subhranshu Sahu)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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