A new consortium set to buy Vishal Mega Mart

A consortium of Kedaara Capital and Partners Group is set to buy retailer Vishal Mega Mart. While Kedaara will look after front end operations at the firm, Switzerland-based Partners will manage the back-end. Kedaara Capital is an India-registered alternative investment fund. Up to 51 per cent FDI is allowed in multi-brand retail in India. Consequently, Partners Group teamed up with Kedaara Capital to acquire the firm with the majority of investment coming from Partners.

Vishal Mega Mart is a fashion-led hypermarket chain with a footprint of over 229 stores across 110 cities and towns in the country. Apart from apparel, footwear and lifestyle accessories, the firm also offers grocery and general merchandise. The retailer slipped into a crisis due to aggressive expansion of its stores, leading to piling of debt on its books.

Vishal Mega Mart was bought by TPG and Shriram Group in a distressed condition for Rs 70 crores in 2010. The valuation of the company has risen more than 70 times in the last eight years. Over the years, TPG has infused over Rs 760 crores. Investor interest in India’s fashion retail business has seen a significant increase and valuations are expected to remain expensive.