Nilgiris set to take control of Valdel Retail

Nilgiris' Dairy Farm, controlled by Actis Private Equity, is set to take control over Bangalore-based Valdel Retail over a period of time. Valdel Retail, is a part of the Valdel Group, which has significant interests in engineering and construction.

According to industry sources, the deal is structured over two steps. For starters, the existing 15-odd retail outlets owned by Valdel Retail will be rebranded as Nilgiris' through a franchisee agreement for a certain period of time.

Post this, Valdel is likely to exit this retailing business in favour of Nilgiris. Valdel Retail manages two brands - 'Dailys' for supermarkets and 'Centra' for large-format department stores. These stores are located in Bangalore and Mysore.

Spokespersons from both the companies were not available for comments. Nilgiris is a century old retail chain focused on South India. UK-based private equity fund Actis during late 2006 acquired 65 per cent for around Rs 300 crore from the promoters of Nilgiris.

Industry sources further indicate that with this move, Nilgiris gets a boost to its rapid expansion plan which is underway, with a possibility of a Rs 150 crore IPO in due course.

Valdel Group is a breakaway faction from M S Ramaiah Group, a noted business house in Bangalore which has varied interests in healthcare and education. The five year old Valdel Retail in addition to retail had forayed into Business Process Outsourcing business, which also did not build up steam.

Valdel in the engineering business operates two separate JVs with L&T and US-based S&B Engineers & Constructors, offering integrated services to the oil & gas, refinery, petrochemicals and pharmaceutical sector.

In addition to this, Valdel Group has floated an equal joint venture with Unitech for developing shopping malls and hospitality sector. This joint venture is estimated to invest around Rs 200 crore to develop properties over 6 lakh square feet.