The Hindu Business Line : Foreign equity infusion in Hero’s single brand retail venture okayed

New Delhi, April 20 The Foreign Investment Promotion Board (FIPB) has cleared a proposal from Power Plate India, promoted by the Munjals of automobile major Hero group, to induct 50 per cent foreign equity in the company. The clearance has come despite requests from the Department of Revenue to keep the proposal in abeyance.

Sources said that the Revenue Department wanted a decision on the company’s proposal to be postponed till details about the company directors and its accounts were obtained and examined.

However, the board decided to overrule the Revenue Department’s views and took the stand that since the company would be retailing products that are retailed worldwide under the same brand name and is branded at the time of manufacturing, other considerations were not necessary and went ahead with the clearance, sources said.

Power Plate India is promoted by the Hero Motors Managing Director, Mr Pankaj Munjal, and his wife, Ms Charu Munjal. The foreign investor is UK-based Power Plate International (PPI). PPI has five subsidiaries and a global distribution network in over 60 countries.

The Indian joint venture company’s plan is to enter single-brand retailing of Power Plate health and fitness equipment in India. Foreign direct investment up to 51 per cent is permitted in single brand retailing.

The company, in its application to the FIPB, had said that it intends to start retail trading of equipment manufactured by PPI and its affiliates, give training to the dealers, technicians and customers, provide after sales services and supply of parts.

The CEO of Power Plate India, Mr A.K. Dewan, said that apart from the joint venture company, the Hero group has also entered into a contract manufacturing agreement with PPI under which Power Plate branded equipment are being manufactured by Hero Motors at its Ghaziabad factory and exported to the parent company abroad.

Explaining the benefits of Power Plate machines, Mr Dewan said that “these are the most time efficient machines. In conventional fitness equipment one has to spend around three to four hours a week to maintain fitness. But in these machines one needs to spend only around 45 minutes a week and that too without any strenuous exercises,” he said.

Related Stories:
Will FDI in retail result in lower prices for consumers?
Armani, Cartier allowed single brand retailing
How FDI has created a dual economy in China

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
No cement export ban on supplies to SEZ units

NTPC-SAIL’s Bhilai power project unit goes on stream

Shipping Corporation (Rs 220.50): Buy

Day Trading Guide

Central education institutes asked to implement OBC quota

Consumer durable firms feel the heat of rising steel costs

Short-term weakness in gold likely

ICICI Bank hikes auto loan rates; others may follow

Iron ore exporters may face Rs 4,600 cr extra duty burden

Volatile equity markets make structured products attractive

CRR hike may not have any negative impact

Wipro: Offers made to 17,500 freshers

Foreign equity infusion in Hero’s single brand retail venture okayed

Company Law Board may get powers to revive sick units