The Hindu Business Line : IOC plans to expand retail role

Retail plans
Already in pact with FMCG companies for Convenios
To sell at various malls, multiplexes and retail outlets
Modalities to be decided jointly with mall developers
In-principle decision taken; board nod to be sought for projects

New Delhi , July 31

IOC is looking at various options in retail, including setting up a new company to further expand its existing small role in non-fuel retail business.

"We are looking at various options, including setting up a special purpose vehicle. Pending that, we are going in for selling at various malls, multiplexes and retail outlets, and forging alliances with various companies," said Mr Sarthak Behuria, Chairman and Managing Director. Declining to elaborate on the issue, Mr Behuria said the plan is at the conceptual stage.

The company has already tied up with FMCG companies for its Convenios; some 240 such stores are already in operation. Asked whether the company had obtained board approval for the purpose, Mr Behuria said that the company had taken an in-principle decision; the board's approval would be taken when a project is on hand.

The modalities for the operation of these retail outlets would be decided jointly with mall developers.

IOC's planned foray into retail comes close on the heels of Reliance Industries Ltd announcing that it would invest close to Rs 25,000 crore to become India's largest retailer through a chain of 1,500 supermarkets spread over an equal number of towns and cities.

As per estimates, organised retail is growing at over 30 per cent annually but accounts for just 3.3 per cent of the estimated retail market of Rs 10,50,500 crore. According to company sources, IOC outlets at the retail hubs would provide customers the convenience of filling fuel or getting a car washed or repaired while shopping.

There are an estimated 220 malls in the country, with Delhi and the NCR having about 50, Mumbai and its suburbs 37, Hyderabad 10 and Bangalore 15.

Real estate developers like DLF, Unitech, Ansals, Omaxe, Rahejas and the Future Group have set up some of these malls and have announced plans to develop more.

Back in black

ONGC seems to have played a vital role in helping IOC in registering net profit in the first quarter of current fiscal.

IOC clocked net profit of Rs 1,781 crore during the quarter, compared to net loss of Rs 58 crore in the corresponding previous period. The figure factors in profit of Rs 3,225 crore from the sale of 20 per cent in ONGC, he said.