Future Group is close to acquiring an e-commerce firm, talks for which are at an advanced stage and an announcement is expected in 10-15 days time, Kishore Biyani, Group chief executive officer said on Tuesday.
The time for acquiring an online business is apt as valuations are low. In the next six months there will be many more closures of online businesses, Biyani said at the Retailers Association of India forum, declining to give further details about the proposed acquisition.
In May 2015, Future Group acquired Bharti Retail in an all-stock deal, valuing the latter at Rs 500 crore in equity after adjusting for accumulated losses of Rs 1,800 crore of the virtually debt-free Delhi-based retailer.
Many online players in the country have been struggling as their businesses are not profitable and companies have not been able to raise fresh funds for operations and expansion. “In the next six months to a year there will be consolidation in the online space with many players expected to shut down businesses, some being acquired by the big players in online business while some will get acquired by the brick and mortar retailers who wants to expand their presence online,” said Amitabh Mall, partner and director, The Boston Consulting Group.
Govind Shrikhande, managing director, Shoppers Stop also said that it is a good time for acquiring online businesses. He said that the company is also open to acquisition but is not aggressively pursuing it.
“If the valuation matches and if we look at ramping up our online presence we may look at it,” Shrikhande said.