Funding top priority for Aditya Birla Retail

Monday, 17 October 2011

While, its competitors are awaiting the final word on FDI in retail, Aditya Birla Retail (ABRL) is in no hurry to scout for foreign partners. Instead it is looking at domestic funding options to expand business. Capital, for them is the need of the hour. ABRL is the retail arm of Aditya Birla Group, a $28 billion corporation. The company ventured into food and grocery retail sector in 2007 with the acquisition of a south-based supermarket chain. Subsequently it expanded its presence across the country under the brand More with two formats: supermarket and hypermarket.

The company has aggressive plans of adding 150 supermarkets and 12-14 hypermarkets year under the More brand. While there is increasing demand, not many retailers are doing well. The EBIDTA levels are the lowest for food while fashion and apparel command higher levels of EBIDTA in India. The government is yet to take a final decision on the issue of allowing FDI in retail and while the wait continues many businesses waiting before finalizing their JVs partners. For example, Future Group reeling under debt pressure is looking forward to FDI. Kishore Biyani, Chairman of the Group has expressed his views several times in the media saying FDI will be a game-changer for Indian retail. The group is currently in talks with Japanese convenience store chain, Lawson Inc for a possible alliance.

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