Inside Apollo Green’s ₹95 Crore Fashion Division Spin-Off: A Deep Dive Into India’s Latest Business Transfer

Corporate restructurings and transformations often seem simple on the surface yet in practical terms represents complexity, but beneath them lies strategic intent, financial recalibration and long-term positioning. Apollo Green Energy  Ltd. (AGEL), a company largely involved in renewable energy and infrastructure projects, took such a step when it launched its fashion manufacturing division in June 2024.

What appeared to be a routine business transfer quickly emerged as a significant corporate event: one that reshapes how the Apollo group wants investors to view its portfolio. The entire fashion business, which includes footwear, leather garments, bags and accessories manufacturing, was transferred into a newly incorporated subsidiary, Apollo Fashion International Limited (AFIL), in a deal valued at ₹95 crore.

The Deal at a Glance

Under the Business Transfer Agreement (BTA) dated June 1, 2024, AFIL acquired net assets worth ₹62.66 crore, including ₹23.5 crore of property, plant and equipment, ₹52.3 crore of inventories and ₹49.2 crore of trade receivables. On the other side of the ledger, it took over liabilities of nearly ₹77 crore, including short-term borrowings and trade payables.

The total consideration of ₹95 crore paid through a mix of ₹61.50 crore in cash and ₹33.50 crore via equity shares (1.11 crore shares at ₹30 each) created a capital reserve of about ₹32.34 crore on AFIL’s books.

In valuation terms, the deal implies a strategic premium, signalling the group’s belief that the fashion business can scale independently and attract fresh pools of capital. Post-transfer, Apollo Green now owns 37.52% of AFIL, while the broader promoter group controls roughly 77% of the fashion subsidiary, maintaining strategic control but allowing operational separation.

Financial Performance

The timing is what makes this transaction particularly intriguing. The worldwide and global supply chain situation for apparel and footwear segment is still unstable and volatile, raw material costs are rising reflecting inflation continues, and financial and working capital pressures are prevalent among manufacturing-centric fashion businesses.

Yet, AFIL’s first full-year performance (FY25) suggests that the business has meaningful scalability. In FY25, AFIL reported ₹182.44 crore in revenue more than double the ₹89.98 crore generated during its previous partial-year period along with an EBITDA of ₹21.95 crore and a net profit of ₹13.07 crore. A 12% EBITDA margin and 7% PAT margin offer early proof of operational viability, especially for a freshly carved-out unit. 

But the numbers also reveal stress: AFIL’s balance sheet shows debt of ₹65.82 crore, with nearly 97% of it being short-term borrowings, leaving the business exposed to liquidity strain. Cash and equivalents stood at a negligible ₹0.04 crore, while receivables surged 115% to ₹46.75 crore clear signs that working capital discipline remains a critical priority. Adding to this is the fact that 45.7% of AFIL’s FY25 revenue came from sales to its former parent Apollo Green, raising questions about diversification and how quickly the new entity can build independent market strength.

Key Financials of Apollo Fashion International Ltd.

According to financial breakdown:

• FY25 Revenue: ₹182.44 crore
  
  

• EBITDA: ₹21.95 crore → EBITDA margin ≈ 12.03%
  
  

• PAT: ₹13.07 crore → Net margin ≈ 7.16%
  
  

• Debt: ~₹65.82 crore (most of it short-term) vs Equity ~₹49.57 crore — gearing is heavy.
  
  

• Related party caution: ~45.7% of revenue came from sales to Apollo Green, its parent.

Interpretation: The numbers show scale, margin improvement (vs earlier smaller period), and a viable business — but the heavy debt and dependency on the parent group mean the risk is significant.

Strategically, the spin-off provides Apollo Green with what it likely wanted and dreamed big: a more organized balance sheet and a clearer identity focused on renewable energy. By establishing the fashion enterprise as a separate or into its own corporate entity, Apollo Green minimizes operational complexities and better aligns itself for upcoming fundraising efforts or collaborations in the green energy  sector. Meanwhile, AFIL gains the breathing room to build its brand, improve margins, and attract fashion-focused investors, a segment that values consumer-product clarity more than conglomerate complexity. Spin-offs like these often aim to “unlock value,” but value only materializes if the carved-out entity demonstrates sustainable growth, cash-flow improvement, and reduced leverage over time.

Yet, risks remain.AFIL needs to demonstrate that its early profitability is sustainable and not a one-year anomaly.  guess? High leverage, heavy dependence on short-term loans and borrowings, and dependence on the parent for earnings indicate that the company still has structural weaknesses.  Do you know Supply chain disruptions, commodity volatility and evolving global compliance standards add to the unpredictability.  Seriously, the question for Apollo Green remains whether this spin-off will actually sharpen its strategic focus or whether the group will gradually restructure itself from its non-core activities over time.

Conclusion

The verdict, for now, is nuanced: Apollo Green’s ₹95 crore fashion spin-off is both a strategic clean-up and a bet on independent value creation. AFIL has shown early promise, but its long-term trajectory will depend on how quickly it can diversify, deleverage, and deepen its market presence without leaning on the parent. As investors scrutinise India’s growing wave of corporate carve-outs, this transaction offers a telling insight into how mid-sized groups are preparing their businesses for sharper, more specialised capital cycles.