As per the transaction details, Wal-Mart would buy six crore shares for R60 crore through its holding company Wal-Mart Mauritius. Bharti Enterprises would directly invest into the company. According to a source privy to the details of the board meeting, the company would raise more money in the months ahead to power its expansion plans. The JV is looking at expanding its brand to newer geographies. This is a conscious decision to be able to tap the local sourcing channels once FDI in multi-brand retail is allowed by the government, the company source told FE on conditions of anonymity. At present, the JV's total authorised share capital is R500 crore.
When contacted a Bharti Wal-Mart spokesperson confirmed the development. She said, The additional funds for Bharti Wal-Mart have been made to support the business plans of the JV company. She added that the transaction would however not change the current proportionate holdings of both partners.
According to the spokesperson, the funds would be used to cover the capital and operational expenses, including the running of current cash and carry stores and distribution centres and the opening of new ones. In May this year Bharti Wal-Mart's managing director and chief executive Raj Jain had said that the retailer would open eight to 10 outlets in the next couple of years.
Since setting up the JV in 2009 the company has invested around R200 crore in its operations to open six Best Price Modern Wholesale stores in states such as Madhya Pradesh, Punjab and Rajasthan.