If foreign brands sell quality products here, they're welcome: Subrata Roy

Interview with Chairman, Sahara India Pariwar

After unveiling his Rs 3,000-crore retail foray, Sahara India Pariwar Managing Worker & Chairman Subrata Roy tells Dilasha Seth and Devjyot Ghoshal there’s more in the works, particularly for the hospitality sector and the dairy business. He emphasises raising foreign debt isn't much of a problem, though Indian bankers may be difficult to please at the moment. Edited excerpts:

You have announced ambitious plans for Sahara’s entry into retail. What is the market share and growth you are looking at?
The size of the Indian retail sector is about Rs 1,24,000 crore a month, and we aim to capture 20 per cent of the retail market in about three years. We are targeting sales of Rs 15,000-20,000 crore in the first 12-18 months, and after that, Rs 40,000-50,000 crore. The retail sector is growing 20 per cent a year, and we will also grow at that pace.

 

Since you have now entered the retail space, foreign direct investment (FDI) in multi-brand retail would mean competition for you. What is your view on FDI in retail?
I am not against FDI in retail. If foreign brands sell quality products in the country, they are welcome, as it is good for the country. Quality is primary, so they should be asked to sign a guaranteed declaration for maintaining quality. But I am strongly against foreign chains selling products manufactured abroad in the country. The products should be manufactured in India — this would boost employment in the country.

Is there any new plan for the hospitality business in India?
I don’t want to talk much about it. It’s not just going to be rooms and hospitality, but hospitality and entertainment. Our plan is ready, as is the design. This would be the first time something like this would be done anywhere in the world. There would be about 80 centres across India.

What about foreign ventures? You have already entered Bangladesh with real estate. Do you also plan to take your retail model there as well?
Yes. We do plan to take our retail business there after two to three years. In the fourth, we will definitely be there.

Are there plans for other countries?
Beyond Bangladesh, we have plans to enter Macedonia. There, we will get into tourism, dairy and mining. We want to create a city like Las Vegas there. We have not finalised the budget. We will be ready with the concept by September, while the operations would start in about two and a half years.

You have also said you would enter the dairy business.
We are planning the world’s largest dairy, with 2.5 million cattle. We will announce that in November.

What are the other sectors you are eyeing?
We will be applying for a banking licence.

Since a lot of announcements seem on the way from Sahara, how are you planning to finance the ventures?
There are many offers we have for debt---very cheap debt, but not much of Indian debt. In India, my men have to run from one banker to another, pampering them to secure debt. On the contrary, foreign financiers fly five people to India at their own expense to push me for debt. For the Grosvenor House buy, we got debt at just 2.5 per cent interest.

You had earlier planned an initial public offering (IPO) of about Rs 3,000 crore for Sahara Prime City, which did not materialise. Would you revive that?
We are not thinking of an IPO at the moment. But the next time we plan, it would be in a big way, bigger than the Rs 3,000-crore one we had planned earlier.