Government Mulls Higher FDI In Retail

If the government has its way, the foreign direct investment policy in retail may see some changes. The department of industrial policy and promotion (DIPP) is preparing a detailed policy for further liberalisation of FDI in the country, reports . This is likely to be announced before the Union Budget in end February.

 The new policy may allow a higher FDI in sectors that do not directly affect the smaller domestic retail companies. They may be sports goods, electronics and building equipment. These sectors may be allowed a higher FDI cap of 51 per cent.

 Currently the government permits 51 per cent FDI in single-brand retail through FIPB. For multi-brand, there is 100 per cent FDI in cash-and-carry through the automatic route.Private equity fund  wants to exit(PTL). According to The Economic Times, Indian tractor companies like  (M&M) and Chennai-based  may be interested in buying Actis’ 28.4 per cent stake in PTL. They are believed to be in talks with Actis. Citigroup is advising Actis on the sale.The report also says that the other major shareholder in PTL - the Burmans of Dabur who hold about 14 per cent stake in PTL - may also consider a sale if the situation demands.

 

PTL is a leading tractor manufacturer and was earlier owned by the state government of Punjab. It was in 2003, Actis acquired the Punjab government's 23.5 per cent stake in PTL through a tender. Prior to that Actis had acquired a 4.9 per cent stake through open market. This gave the private equity fund a total of 28.4 per cent stake in PTL. Actis has invested a total of $60 million in PTL (Read the on the PTL investment - pdf).