Aditya Birla Group has short-listed French tycoon Bernard Arnault’s investment company L Capital, General Atlantic Partners, Singapore sovereign fund GIC and Standard Chartered Private Equity to raise $400 million (Rs 2,400 crore) for its consolidated retailing business unit, people familiar with the matter said. Birla will raise $200 million each from two investors in the coming weeks, which values the new retail company at $2.2 billion (Rs 13,000 crore) in enterprise valuation, they added. TOI in July reported that Birla had mandated Standard Chartered Bank to sell stake in the unit that’s being created through a merger of Madura Fashion & Lifestyle, department store chain Pantaloons and More supermarkets.
The four investors are completing due diligence process before Birla decides on the eventual picks. The chosen investors and their investment plan will be built into the scheme of merger being prepared for the three group companies. Madura is part of the listed Aditya Birla Nuvo, while Pantaloons is a listed company. More supermarkets are parked under Aditya Birla Retail, which is privately owned by group chairman, Mr. Kumar Mangalam Birla.
As part of the plan, Madura will be subsidiarized with public shareholding. Pantaloons and More will be merged with the demerged Madura subsequently. Birla is expected to infuse another $100 million into the new company, possibly through a rights issue or other instruments, sources said.
Several foreign investors had looked at the stake-buy opportunity but the aforesaid four names remain in the process. A source said one more sovereign wealth fund might still be in the fray. This could not be confirmed independently. Some global investors exited the process as the stake-buy did not guarantee them board seats, a second source said. An Aditya Birla spokesperson said the group doesn’t comment on market speculation.
