RIL-Metro deal by Dec-end, may see biz focus on B2C
New Delhi: Reliance takeover of Metro’s cash and carry business – which is expected to be finalised in time for the group’s late founder Dhirubhai Ambani’s birthday later this month – will give the oil-to-telecom conglomerate the option to convert the 31 stores of the German company’s India arm into multi-brand retail chains and take on the likes of D-Mart.
“Following the transaction, majority Indian ownership will create the regulatory space to even convert the operations into a B2C entity. It will provide a better shopping and pricing experience. But it’s a call that has to be taken,” said a source familiar with the transaction.
Under existing foreign investment rules, overseas players are not allowed to enter the multi-brand retail business, forcing players such as Metro to confine themselves to cash-and-carry wholesale and sell to hotels, offices and kirana stores. In fact sales to traders generates around half the revenue for Metro, with another one-third coming from offices.
