Bharti Walmart, the joint venture between Sunil Bharti Mittal's Bharti Enterprises and Walmart, the world's largest retailer, plans to raise as much as Rs 500 crore from global banking majors such as Citigroup, JP Morgan Chase, Deutsche Bank, and BNP Paribas, to fund its plans, according to sources in the know.
Bharti Walmart earlier said it planned to set up 10 to 12 wholesale cash and carry centres in 2012 which will generate employment for about 5,000 people. According to estimates, each cash and carry centre requires investment of Rs 50 to Rs 60 crore. It currently has 17 stores across the country.
A Bharti Walmart spokesperson confirmed that talks were on. “The money is being raised for investing in building of an efficient back-end infrastructure and for our Best Price Modern Wholesale Cash and Carry store roll out programme,” a company spokesperson said.
India currently allows 100% foreign ownership in wholesale operations and single brand retail. Germany's Metro, French company Carrefour and UK's Booker are the major players in Indian cash and carry market, besides Bharti Walmart.
"It shows that market is maturing and banks are gaining confidence in the sector. Some level of equity investments have happened in the JV and they thought it is time to leverage. It also could be that domestic partner may not want to put equity and a $100 million debt is not a big deal for Walmart," says Harminder Sahni, founder and managing director of Wazir Advisors, a business consultancy.
In December, the government put on hold plans to open the multi-brand retail sector to foreign chains such as Walmart , Carrefour, Tesco due to political opposition.
However, Finance Minister Pranab Mukherjee in his 2012 federal budget speech said talks were on with several Indian states in an effort to reach a consensus on the issue.