The Hindu Business Line : Bharti to invest $2.5 b in retail venture by 2015

NEW THRUST AREA: Mr Rajan Bharti Mittal (right), Joint Managing Director, Bharti Enterprises, and Mr Vinod Sawhny, Head, Bharti Retail, addressing a press conference in the Capital on Monday. — Kamal Narang

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New Delhi Feb. 19 Bharti Enterprises on Monday said that it would invest $2-$2.5 billion by 2015 for its maiden retail venture, to be rolled out under its wholly-owned subsidiary, Bharti Retail (Pvt) Ltd. To raise the sum it would use a mixture of internal accruals, debt and equity.

"After revolutionising the Indian telecom sector, retail is our next big focus area. The investment will be around $2-2.5 billion by 2015," said Mr Rajan Bharti Mittal, Joint Managing Director, Bharti Enterprises. "While we are looking at around 10 million sq ft of retail space pan India, we plan to employ around 60,000 people for the purpose," he added.

retail outlets

Bharti Retail will launch its retail outlets in multiple formats that would include hypermarkets and supermarkets. For the smaller format convenience stores, the company is also looking at partnering with existing local storeowners across the country through a franchise model. "Though organised retail which currently accounts for 3 per cent of the domestic retail market, has tremendous growth potential, the market is still dominated by unorganised players. The domestic retail market is big enough for both big and small players to co exist," Mr Mittal said.

More forays

The company plans to roll out its first store by the first quarter of 2008, beginning with areas having a population of over a million, and will later foray into smaller towns and cities. The company hopes to earn around $5 billion by 2015 from its retail initiative.

Bharti Retail, however, made it clear that its current announcements did not include its plans with its joint venture partner Wal-Mart. "Our joint venture with Wal-Mart is a totally different proposition and it has nothing to do with our current announcements. We are still in talks with Wal-Mart with regards to our cash-n-carry format, and we will let everyone know as soon as everything has been finalised," said Mr Mittal. The company, in November 2006, had made public its alliance with Wal-Mart, the world's largest retail chain, for back-end support in its wholesale retailing initiative, where Bharti itself will handle the front-end operations. Wal-Mart's Vice-Chairman and Overseas Operation Head, Mr Mike Duke, is set to visit India on February 22, when a possible announcement on the joint venture is expected.

Mr Mittal also confirmed reports that the company had given an explanation of nature of its agreement with Wal-Mart to the Union Government, after questions were raised on its tie up, following the controversy over FDI limits in the retail sector. "We are absolutely in line with the policy and guidelines announced by the Government," he added.

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Bharti to invest $2.5 b in retail venture by 2015