Johannesburg, Oct. 2 (PTI): Bharti Enterprises will take a decision this month on the shape of its partnership with global retail giant Walmart, including joining hands for operations in the country’s multi-brand segment.
The group, which has a 50:50 joint venture with Walmart for wholesale cash and carry, is understood to be anxious after their partnership came to a standstill, with no new stores being opened.
“Within October, I would say, Walmart should have taken a decision of their vision for India and Bharti could have taken a decision whether it matches our aspirations,” Bharti Enterprises chairman and group CEO Sunil Bharti Mittal said on the sidelines of the second India-Africa Business Council (IABC) meeting here.
He said, “We are awaiting Walmart’s final response to Indian retail and then we will evaluate our options.”
While Mittal didn’t elaborate on the future course of action, sources said the Indian partner was getting anxious as Walmart’s indecision was affecting even their cash-and-carry venture, which runs Best Price Modern Wholesale stores.
“For the last several months, nothing has happened. No stores are being opened and it can’t be in a standstill. Some decision will have to be taken, it can’t carry on being in the speculative phase,” a source said.
Bharti Walmart runs 20 Best Price Modern Wholesale stores in Amritsar, Jalandhar, Kota, Bhopal, Ludhiana, Raipur, Vijayawada, Agra, Meerut, Lucknow, Jammu, Guntur, Aurangabad, Amravati, Hyderabad and Rajahmundry.
After the government allowed 51 per cent FDI in multi-brand retail in September last year, Walmart has sought clarity on aspects of the policy, especially the sourcing clause. In July, it expressed its inability to meet the norm requiring 30 per cent procurement from small industries, saying it could source only about 20 per cent.
The government subsequently diluted the clause to allow global retailers to source 30 per cent of their products from small and medium enterprises only at the start of the business.
Walmart has also been probing alleged corruption practices at its local arm, after which its India head Raj Jain and CFO Pankaj Madan quit the company.
The company’s $100-million investment in Cedar Support Services Ltd, a subsidiary of Bharti Ventures, is also being probed by the Enforcement Directorate for violation of norms.
Asserting that there is nobody in India who can buy Airtel, Sunil Mittal today said the telecom firm would look at opportunities to acquire another firm in India, provided there was a clear merger and acquisition policy in place.
“I don’t think that there is anybody in India who can buy us,” Mittal said when asked about the new M&A norms in the works and whether his company would be the biggest buyer or the biggest seller.
“We will be looking at opportunities (for consolidation) but for that a clear M&A policy, which has the objective of being an enabler for consolidation, is required,” he added.
Airtel is India’s largest telecom firm with 192.22 million subscribers as of August-end.