Dabur India has kept aside up to Rs 500 crore for making acquisitions in the FMCG space and this could also be used for funding the Burman’s retail ambitions.
NEW DELHI: Having made a success of their investment in Punjab Tractors, the Burmans now seem to be eyeing a big play in retail.
The family - promoter of FMCG major Dabur India - has been in negotiations with several multinational retail chains such as French major Carrefour, Hong Kong-based Hutchison Group company AS Watson and US major Radioshack for partnering them in India. While Carrefour has been in talks with many other Indian business houses - such as the Wadias of Bombay Dyeing - as well, it is perhaps for the first time that AS Watson and Radioshack have evinced interest in the Indian market.
AS Watson operates a health and beauty chain, besides dealing in food and home electronics. It has a wide presence in Asia with outlets across Hong Kong, mainland China, and other south-east Asian countries besides Turkey and Slovenia. Radioshack is an New York Stock Exchange-listed home entertainment products retailer.
Dabur India chairman VC Burman’s son Mohit told DNA Money: “We have big plans for retail. We have been in dialogue with Carrefour, AS Watson, Radioshack and many other foreign retailers, but till foreign investment (FDI) is allowed in retail trade these chains cannot come to India. So, now we are looking for a deal where we can either forge a joint venture or go 100% on our own”.
Mohit was the force behind the successful purchase and profitable resale of the Burman family’s investments in PTL, which was bought by Mahindra & Mahindra last week. He is now spearheading the family’s retail ambitions. Mohit has bought a minority shareholding in the local retail chain Vishal.
Negotiations with all the three foreign retail majors have remained inconclusive since partial FDI is allowed only in single-brand retailing. None of the three aspirants qualify as single brand retailers.
Asked whether the investment in retail would be made through the family’s investment companies or through Dabur India, Burman said “we could take either route. If the segment is FMCG and pharma, Dabur will take on the retail business, but any other segment would mean the family gets into it. Either way, we will take a decision in the next few weeks”.
Burman declined to outline the investment the family has earmarked for retail. But a little over Rs 300 crore from the sale of the family’s 14.2% stake in Punjab Tractors could form the initial corpus. Then, Dabur India has kept aside up to Rs 500 crore for making acquisitions in the FMCG space and this could also be used for funding the Burman’s retail ambitions.
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