Retail in Asia

In Shops

Mitsubishi surprises Biyani, wants stake in flagship Big Bazaar

Japan’s Mitsubishi Corporation has sprung a surprise on Kishore Biyani by asking for a piece of Big Bazaar, Future Group’s flagship retail business. Sources familiar with the development said the Japanese giant had made it a pre-condition to invest in Future Group’s food sourcing and back-end infrastructure.

The two sides discussed the issue in the US last week and the Japanese company even suggested a convertible structure that would allow an equity exposure in Big Bazaar, as and when foreign direct investment was allowed in multi-brand retailing. Currently, both Big Bazaar hypermarkets and Food Bazaar supermarkets are within Future Value Retail, Pantaloon’s wholly owned arm.

Big Bazaar is an INR8,000-crore (INR80 billion, USD1.42b) high-growth business and Biyani wants to grow it further into an INR20,000-crore giant, before exploring strategic monetising options. Sources say Biyani is keener on a strategic retailer like Walmart for his crown jewel when regulations permit.