Metro may raise debt from India

Metro Cash & Carry, the ¤27 billion German conglomerate into retailing and wholesale, is looking at raising debt from Indian markets to fuel its market expansion plans here. The company presently has invested Rs 175 crore for its two distribution centres in Bangalore and is looking at other cities to widen its reach in India.

The company is looking at West Bengal, Andhra Pradesh, Tamil Nadu, Maharashtra and Punjab to locate its centres. Each distribution centre will cost approximately Rs 80 crore besides the land value, according to Metro.

Said Harsh Bahadur, MD, Metro Cash & Carry India: "We are planning to expand in India on an aggressive scale and with the kind of investments needed to pan out the presence here, we might look at the option of raising debt from India. Debt seems to be cheaper in India than other countries and we will look at exposing ourselves to a decent level of debt here." The company, he said, already has clearance for a total investment of Rs 600 crore into India.

Giving the example of how fast Metro expands in a country, Bahadur said that in the last two years, Metro opened 26 distribution centres in Russia and is are looking at a similar pace here.

Metro Group is also stepping up its sourcing from India which is presently at $60 million. The company in an effort to streamline its efficiencies with its suppliers has launched its Supplier Relationship Portal which will enable its 600 plus suppliers across the country to efficiently deal with Metro India.

This portal, according to Metro, will give a snapshot of all the requirements of Metro to its suppliers, who based on this live information can plan their inventory better.

Metro India is also readying itself for the impending APMC Act amendment by the Government of Karnataka which will allow sale of agricultural produce from outside an APMC yard, a place where it is presently barred.

"As we understand, the amended draft is ready with the government of Karnataka and we look forward to the amendment at the earliest," Bahadur noted.