Comments
Kishore Biyani, CEO, Future Group, is ready to declare ownership of southern supermarket market chain Nilgiris. The deal is estimated to be less than ₹200 crore.
Clubbing his convenience store format KB’s Fair Price along with Nilgiris as almost similar retail offerings, Biyani also plans to extend his online grocery sales servicethrough Nilgiris outlets.
“We will have online stores for KB’s Fair Price and Nilgiris and there will be kiosks outside the stores that will be run by franchises,’’ said Kishore Biyani, CEO, Future Group.
Actis stakeThe buyout of the Nilgiris chain has been on the cards since early this year, and is likely to fructify with the Future Group buying out the complete 65 per cent stake of Actis Capital along with the remaining stake of the Nilgiris promoter through Future Consumer Enterprise, Future Group’s integrated food and FMCG company.
“Actis is in the process of offloading stake and it is up to them to give it to us,” said Biyani. Future Consumer Enterprise (earlier Future Ventures) has been offloading stake in companies such as Capital Foods in the recent past, and simultaneously picking up stakes in small companies, such as Baker Street in Pune.
“Today, Future Consumer Enterprise is sitting on a cash pile of ₹250 crore and can afford to completely buy out companies like Nilgiris. It recently also bought out a Pune-based bakery company,” said a Future Group official.
Inorganic growthThe Bangalore-based supermarket format Nilgiris has stores across Tamil Nadu and Karnataka, with expertise in the dairy category.
Its acquisition will give Future Group a stronger presence in southern markets, where it has no convenience stores such as KB’s Fair Price or Aadhar.
In 2012, Future Group acquired North-based convenience store Big Apple at ₹65 crore and the Nilgiris buy will be the second in a similar format.
The group’s convenience and grocery stores — Big Apple, Aadhar and KB’s Fair Price — are under Future Consumer Enterprise.
Analysts tracking Future Group said that with the acquisition of Nilgiris, Future Group will gain a foothold in southern markets, where it has been lacking a presence in convenience store formats.
Since it is difficult to grow by adding new stores, acquisitions are the best way forward for retailers.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.