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Consolidation is 'inevitable', gaining momentum in retail sector: Analysts

It is a tough business with wafer-thin margins and supply chain challenges

K Raghavendra Kamath  |  Mumbai 

Shoppers Stop
Shoppers Stop sold loss making upmarket chain Hypercity to Future Retail for an enterprise valuation of Rs 911 crore

With private equity firm, TPG Capital's reported plans to sell Vishal Megamart, is gaining ground in the Indian retail sector, said, analysts and retailers.
 
which bought the wholesale business of seven years ago is looking to sell the unit and the valuation could be around Rs 1,500 crore, according to reports.

 
"It is quite natural that they being an investor want to exit their to book profits. They have turned it around and now want to sell," said an banker who refused to be quoted.
 
TPG plans are a continuation of what has been happening in the of late - rivals buying out each other.
 
Last week, sold loss-making upmarket chain Hypercity to for an enterprise valuation of Rs 911 crore. While itself did three deals within a month selling five per cent in the company for Amazon, leaving airport retail and Hypercity sell-off.

Kishore Biyani owned has done five in five years - buying Big Apple, Nilgiris, and retail venture of Heritage Foods.
 
"Only Future Retail, and are doing well. Others are still figuring out the model," said Abneesh Roy, Senior Vice President,
 
“It is a tough business with wafer-thin margins and supply chain challenges,” he said. Govind Shrikhande, Managing Director of said, unless there is scale, cannot be profitable.
 
is the way out in hypermarkets,” he said.
 
Analysts also said that since there are barriers on multi-brand retail, domestic retailers and investors would be the potential buyers.
 
“If multi-brand retail rules are changed, it will change the scenario,” said Abneesh Roy of Edelweiss.

First Published: Wed, October 11 2017. 14:25 IST
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