NEW DELHI: Economic Times – Kishore Biyani-owned Future Group, India’s largest listed retailer by revenues, is negotiating with private equity firm Actis Capital to buy Nilgiris, a Bangalore-based supermarket chain in which it holds a majority stake, a person with knowledge of the negotiations said.
If the deal eventually goes through, it will give Biyani control over 140 supermarket chains in south India, where the Future Group is trying to boost its presence. “Nilgiris has an annual turnover of 700 crore but 60-70% of the stores are run by franchisees and Nilgiris gets a fee for use of the brand and by selling bakery and dairy products to the franchisee stores. So the revenue is not all on Nilgiris’ books. According to me, the enterprise valuation should not be more than 450 crore,” the person aware of the discussion said.
In 2006, UK-based Actis had bought 65% for about $65 million in Nilgiris.
Nilgiris is India’s oldest organised retail chain founded in 1905. Since India barred foreign investment in multi-brand retailing at that time, Actis had invested in Nilgiris Dairy, the backend company that operates some of the stores. A spokesperson for Future Group declined comment while Tashi Lassalle, a spokesperson for Actis in London, said the company does not comment on “market speculation”.