The stock dropped 3.86%, following a sharp rally on Monday and was down almost 4% at rs 380 on the Bombay Stock Exchange.

The Kishore Biyani-led Future Group had said that it would spin off its branded apparel business Pantaloons brand into a separate entity, in which Aditya Birla Nuvo will infuse Rs.1,600 crore to acquire controlling stake.

On completion of the demerger process, subject to necessary and statutory approvals, the demerged entity will be automatically listed at the Bombay Stock Exchange and the National Stock Exchange, the Future Group said in a statement.

"The proposed acquisition is in line with our strategic intent to be on the top of the league and to create the largest integrated branded fashion player in the country through an extension into the value segment. This acquisition will catapult ABNL to the pole position in the branded fashion space in all the segments with a pan-India presence," Kumar Mangalam Birla, chairman, Aditya Brila Nuvo said.

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