The RBI last month clarified that companies having foreign investments of less than 50%, but owned and controlled by Indians, will be considered Indian firms, and such firms' investments in step-down subsidiaries will not be considered foreign investment. The policy defined majority ownership as more than 50% stake, and control as the ability to appoint majority of directors.
In an interview with Economic Times, Kishore Biyani has shared that to benefit from this ruling Future Group is creating holding companies for neighborhood grocery chain KB Fair Price, home improvement company Home Town and sports retail company Planet Sports where it will offer 49% stakes to private equity firms. After these deals are done, Future Group will restrict itself to managing the Big Bazaar chain, Central fashion mall chain and Brand Factory outlets.
Future Group, which has been on a strategic selling spree to pay back debts also clarified that so far only the money from sale of Pantaloons and Future Capital has come. The money from the sale of insurance business is yet to come and then there are deals in the pipeline including AND, Biba and Capital Food.. In the meantime the company has acquired Express Retail (Big Apple) and stakes in footwear brand Tresmode and designer brand Mineral. The company has also stayed on course for expansion. They are expected to open seven-to-eight Central in the next six months in Kochi, Pune, Mumbai, Delhi, Hyderabad, Amritsar and Bangalore, and 10-12 Brand Factory outlets in the same period. In the last 2 months Big Bazaar stores have opened in Patna, Chandigarh, Agartala, Thane and Kolkata.