The government has of late diluted some of the more stringent clauses in the policy. But this piecemeal approach is causing foreign investors to have second thoughts on putting their money in Indian retail, and depriving the sector of much needed capital, reports CNBC-TV18's Menaka Doshi and Farah Bookwala.
Aditya Birla group's two year-long search for a foreign financial investor in the company's retail businesses — Aditya Birla Retail (ABRL), which runs supermarket and hypermarket chain 'More' and Madura fashion and garments has not yielded fruit so far. But Birla says he continues to look for an attractive proposition.
Aditya Birla group's two year-long search for a foreign financial investor in the company's retail businesses - Aditya Birla Retail (ABRL), which runs supermarket and hypermarket chain 'More' and Madura fashion and garments hasn't met much success. But Birla says he continues to look for an attractive proposition.
A financial investor will be particularly beneficial to Birla's cash-strapped supermarket business, which is steeped in losses of Rs 510 crore, and underwent consolidation last year.
"We are quite happy to sell a stake to a financial investor. Not to a strategic one. That's been our stated objective and we continue to stand by that," Birla said at an interaction post the announcement of Ultratech Cement's acquisition of JP Associates' cement plant in Gujarat for 3,800 crore rupees.
ABRL shut down several unviable 'More' stores last year and exited markets such as Mumbai completely.
But Birla says the group's wait for an investor has stretched longer than anticipated, given the lack of clarity on the multi-brand FDI policy, which has foreign investors adopting a wait-and-watch approach.
"India is not a favourite destination to start with. Some of the regulations around FDI in retail need to be fleshed out and eased out for the sector to see substantial investment," he said.
Mirroring the sentiments of other stakeholders in the retail sector, Birla says the devil lies in the details of the policy, which continue to be ambiguous till date.
"We need much more clarity in FDI and much more liberalization whether in investing in front end or back end and on the nitty-gritties before you can see investors come and put their dollars in," he said.
So till the retail businesses' secure a financial investor — and given the consumption slowdown, high costs and interest rates —it's going to be a tough walk alone in the woods.
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