Japan's Aeon To Invest In Indian Retailers

Japanese Aeon - retailing and financial services provider is planning to invest in Indian retail business and is in talks with two Indian grocery retail chains, according to BS.
The Indian companies would divest their stake to Aeon.

Aeon Co, a diversified conglomerate operates in various retail segments ranging from supermarkets, convenience stores, department stores, small supermarkets, discount stores and drug stores, besides financial services. The company is focused on Asia, with operations spanning China, Vietnam, South Korea, Indonesia, Thailand, Taiwan, the Philippines and Malaysia, besides Japan. The company operates a liaison office in India.

Indian retailing chains have the only option to divest their stake in back end operations for strategic investment through global retailing majors, like Walmart, Carrefour.
The Indian government removed the 51% cap on FDI into single-brand retail outlets in December 2011, and opened the market fully to foreign investors by permitting 100% foreign investment in the area, subject to the FIPB sanctions and conditions mentioned in Press Note 3[8].
The Department of Industrial Policy and Promotion (DIPP) is also planning to open 51% foreign investment in 'multi-brand' retailing. Currently, this sector is limited to a maximum of 49% foreign equity participation.
According to Economic Survey 2011-2012, FDI in multi-brand could help in curbing food inflation in a significant way.

Inter-Ministerial Group’s (IMG) report on inflation recommended, leveraging FDI in multi-brand retail as one of the means for addressing issues relating to high rates of food inflation and low prices realised by Indian farmers. While agricultural marketing could improve immensely with the growth of modern retail trade, revenue to the government could also increase, as at present the retail sector is largely unorganised and has low tax compliance.
FDI in multi-brand retail would also help in developing a 'farm-to-fork' retail supply system, and addressing the investment gaps in post harvest infrastructure for agricultural produce, it said.
Recently, Swedish furniture retailer IKEA’s was planning to invest about R10,500 Cr in India.
L Capital is also planning to invest on the Indian luxury space by setting up a luxury house in partnership with domestic designers.
In the space, Franklin Templeton Private Equity Strategy bought 20% stake in Kimaya Fashions for about R60 Cr.