WIPRO chairman Azim Premji has picked up 10% stake in Chennai-based
supermarket chain Subhiksha Trading for Rs 230 crore. The software
magnate’s interest in scooping up a small pie of India’s trilliondollar
retail market will surely give a leg up to India’s retail industry,
which, of late, has been buffeted by a blizzard of bad news.
Sources said that Mr Premji, in his personal capacity, has cut the deal through his private investment arm, snapping up 10% of ICICI Venture’s stake in the closely held retail chain.
Subhiksha Trading has an equity capital of Rs 32 crore and 10% of equity works out to a meager Rs 3.2 crore. The balance—Rs 226.8 crore—has come as a humdinger of a premium for Subhiksha. Following the transaction, ICICI Venture’s stake in the retail chain has come down to 14%.
In June, the retail chain, which has been looking at a listing, acquired a majority stake in a Chennai-based listed company, Blue Green Constructions and Investments. Once it completes the listing, Mr Premji would get a 10% stake in the food and grocery discount retailer. Wipro is not new to the retail bandwagon. Last year, the company acquired Singapore-based personal care products company Unza Holdings Ltd for $246 million in an all-cash deal. The deal was touted to give Wipro a big foothold across Asian markets in the personal care segment. Although Premji has bought into Subhiksha on his own steam, the deal still holds significance at a time when spiralling inflation is shaking the ground beneath retailers’ feet across India.
Subhiksha promoter R Subramanian has plans to grow the company into a $5-billion entity. At the time of acquiring Blue Green, he had said: “The acquisition comes to Rs 2.5 crore without any liability. Blue Green has a paid-up capital of Rs 5 crore and we will pay 50% to get majority stake. Its promoters, hailing from south Tamil Nadu, had plans to launch consumer durable stores. They had identified properties. But, it did not materialise as they could not raise funds.’’
Despite inflation and economic slowdown impacting the growth of organised retail, this move comes as a big boon for the retail chain, which has been on an expansion spree. Subhiksha has footprints nationally with 1,000 outlets across 90 cities.
In India, dealing with real estate matters can be extremely tormenting especially for a Non Resident Indian (NRI) since transfer of property laws work hand in hand with the provisions of the Fo More
Helplinelaw can set up your session with quality and experienced lawyers to discuss and resolve your legal matters. You can avail consultation in form of sending questions, phone call or webchat discussion More