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.
Last year, India allowed foreign supermarket chains to own up to 51% in domestic retailers. On the other hand, Biyani is also on a selling spree. Earlier this month, the group said it had divested stake in ethnic apparel firm Biba and fashion designer Anita Dongre-run highstreet apparel chain AND for about Rs 450 crore.
Executives say currently the company's debt is at a manageable level of Rs 4,500 crore and the company is hoping to pare it further by selling stake in insurance joint ventures and various other businesses.
