The government has approved a proposal by UK-based retail major Mothercare to invest Rs 25.87 crore for 30 per cent stake in a joint venture with DLF Brands, the retail management arm of realty giant DLF.
Mothercare, which specialises in kids and parenting products, had announced the JV last year through its subsidiary, Mothercare UK Ltd, and has already set up two single-brand stores in the country.
The approval has been given to Mothercare "to subscribe to the equity shares of an Indian company for retail trading under single brand," an official release said.
While the government statement did not provide the details of the proposal, a DLF Brands spokesperson said, "The approval which has been given by FIPB is for the Joint Venture only, which has already been announced to the press."
The spokesperson added, "DLF has 70 per cent share in this joint venture. Mothercare had sought approval for their 30 per cent share from FIPB which they have got."
Mothercare could not be contacted for its comment.
India's FDI rules allow only 51 per cent stake by foreign firm in single brand retailing.
Mothercare Chief Executive Ben Gordon had said during the announcement of the JV, Mothercare Retail India Pvt Ltd, in October the company will have an option to increase its shareholding to 51 per cent.
Mothercare also operates in India through an agreement with Shoppers Stop, under which it runs around two dozen outlets at the Raheja Group promoted large format stores.
