* THE TIMES OF INDIA, KOLKATATUESDAY, APRIL 11, 201714 TIMES BUSINESS

Kolkata: The $5billion RP-Sanjiv Goen-ka group is entering a high-margin andhighly competitive FMCG business withan aim to register a $1 billion revenuefrom the vertical in five years’ time. Thegroup plans to run its FMCG operationsthrough a privately held firm Guilt Indu-stries Ltd and would enter foods businesslater this week with an acquisition in thefoods space soon.

The group earlier had planned to en-ter FMCG category following a Mckinseystudy that advised them to enter bothBPO and FMCG businesses. The Goen-kas have already entered the BPO spacealready through an acquisition of First-source Solutions Ltd.

To begin with, RP-Sanjiv Goenka Gro-up is making a foray into foods with a ho-megrown brand Too Yumm! Sanjiv Goen-ka, the chairman of the group, said it wo-uld concentrate on foods category but la-ter on it would enter other categories likepersonal care, healthcare and beauty ca-tegories in the first 8-9 months. “We arelooking for both organic and inorganicgrowth in foods and talks with a couple ofplayers for acquisition. The first one islikely to complete soon,” he said.

Goenka added that the group hasplans to list Gulit Industries once it has adecent balance sheet. Currently, the mostof its consumer businesses like Spen-cer’s Retail, Au Bon Pain Cafe are under

CESC Ltd. According to him, the group is plan-

ning to invest Rs 10,000-12,000 crore in theFMCG business over a period of 5-7 years.The investment will be in the form of ac-quisition, brand building and new pro-duction capacity. It is planning a series ofacquisitions in all the categories wherethe group wants to have a presence in fu-ture. The group has 25 products in the pi-peline and in the first year, it wouldlaunch 10 products, including Foxnutsand Wheat Thins. “For each product, the-re will be 30 variants. Now, each brandwill be available in four flavours,” he said.

The RP-Sanjiv Goenka Group chair-man pointed out that in the beginning itwould outsource the products from fourmanufacturing facilities in Gujarat, Del-hi and Maharastra. “Later on, we shallhave our own manufacturing units,” headded.

Elaborating the plans for FMCG busi-

ness, he said its products will be initiallylaunched in Kolkata, Pune, Gurgaon andwould be available in 20,000 outlets, inclu-ding big retail chains like Spencer’s, BigBazaar, More, Reliance Fresh. Over a pe-riod of time, there will be in one lakh out-lets across 40 cities. It will undertake in-novative brand campaign using socialmedia like Facebook, Twitter and Insta-gram. Goenka claimed that people fromITC, Marico, Mckinsey are joining thegroup’s FMCG business.

RP-SG Group eyes food foray,targets $1bn revenue in 5 yrs

Sanjiv Goenka unveils new snacks brand

TIMES NEWS NETWORK

Kolkata: The proposed restructuring of theRP Sanjiv Goenka Group flagship companyCESC Ltd is expected in May and thecompany has decided not to infuse freshfunds into power generation.

Sources said that the recast plan forCESC was ready and likely to be announcedin the third week of May along with thefinancial results. “We see merit in clubbingall generating units together. And thedistribution aspect can come under aseparate umbrella. I personally don’t see thelogic of my distribution business inRajasthan or distribution business in Noidaunder separate firms,” Goenka had saidearlier. The recast could see at leastgeneration and distribution verticals inseparate listed entities.

The retail company Spencer’s which is aCESC subsidiary might also be separated asit nears the break-even stage. TNN

CESC recast likely in MayNew Delhi: The Asian Devel-opment Bank (ADB) and a con-sortium of lenders are consid-ering the option of funding Re-liance Power’s proposed gas-fired power station and gas im-port terminal in Bangladesh,the Anil Ambani group compa-ny said on Monday after sign-ing the final agreement withBangladesh Power Develop-ment Board here.

The two sides inked the PPA(power purchase agreement)and implementation pact forthe Phase - I of the project at acost of $1 billion. The agree-ments were sealed in the pres-ence of visiting BangladeshPM Sheikh Hasina at a busi-ness summit organised here byindustry chamber CII.

R-Power plans to moveequipment it had imported

from US gear-maker GE for a2,400 MW plant proposed at Sa-malkot in Andhra Pradesh.Sources said these equipmentstill remain unpacked and car-ry guarantee from suppliers.The project was built aroundthe promise of gas from Re-liance Industries Ltd's KG-D6discovery off the Andhra coastbut scrapped after output fell toa tenth of the target.

R-Power and BPDB hadsigned MoU for the project, en-visaging three phases of 750mw each worth a total of $3 bil-lion, during PM Narendra Mo-di's June 2015 visit to Bangla-desh.

The power plant will be setup at Narayanganj district'sMeghnaghat area, around 40km South-East of Dhaka andthe floating gas import termi-nal at Kutubdia island in Chit-tagong. BPDB has providedland for the power station. Aparallel deal is in the works,wherein R-Power will sourcegas but PetroBangla will usethe full capacity of the importterminal, sell fuel to the powerplant and other industries.

ADB may fundR-Power’s

$1bn projectin Bangladesh

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Reliance Power andBPDB had signed anMoU for the project,envisaging threephases of 750 mweach worth a total of$3 billion

Flipkart’s much-anticipat-ed and widely discussedfund-raise, has been in

the making for months evenas it faced a series of valua-tion markdowns by its exist-ing investors over the pastyear. The domestic e-com-merce player was earlier val-ued at $15.2 billion when itlast raised $700 million fromexisting investors in July2015.

TOI reported about Flip-kart’s latest fund raise in itsMarch 16 edition.

As part of this transac-tion, eBay Inc has put $500million in Flipkart and soldits India business to the Ben-galuru firm. The online auc-tion site will continue to berun as an independent entity,a statement from Flipkartsaid. Sources said eBay Indiamay have been valued atabout $200 million, however,the contours of the deal werenot specified. Tencent andMicrosoft have collectivelypumped $900 million in Flip-kart. “Once the Snapdeal ac-quisition comes through,SoftBank, the online retail-er’s largest shareholder mayput $500 million in Flipkartas primary money besidesbuying secondary sharesfrom Tiger Global,” a sourceprivy to the developmentssaid. Tiger Global, a NewYork-based investment fundis the largest investor withabout 30% stake in Flipkart.

Flipkart’s humongousraise will give it firepowerand bolster its position as itfights a fierce battle with theSeattle-based internet behe-moth Amazon, which has al-located $5 billion for the Indiamarket and launched a wideset of offerings ranging fromPrime subscription serviceto Prime Video even as it pre-pares to push the peddle oncategories like food and gro-cery.

In a prepared statement,Flipkart founders, Sachinand Binny Bansal, who areunrelated, said, “This is alandmark deal for Flipkartand for India as it endorsesour tech prowess, our innova-tive mindset and the poten-tial we have to disrupt tradi-tional markets. It is a re-sounding acknowledgementthat the homegrown tech eco-system is indeed thriving and

succeeding in solving genu-ine problems in people’s dailylives across all of India.” TheBansals, co-founded Flipkartten years ago, as an onlinebookstore and expanded tobecome a horizontal e-com-merce player modelled ontheir ex- employer the JeffBezos-led Amazon. They arenot involved with the day-to-day operations at the compa-ny, presently.

Tencent, eBay Seen AsStrategic Investors China’sTencent, which runs thehugely successful messengerservice We Chat, is being po-sitioned as a strategic inves-tor along with eBay afteryears of getting on board fi-nancial backers in Flipkart.

Tencent joins as a strategicinvestor, bringing experiencein linking social networkingand e-commerce. In leadingthis funding round, Tencentwill lend significant exper-tise to Flipkart, a companystatement said.

“This strategic partner-ship enables Tencent to par-ticipate in the exciting oppor-tunities in e-commerce andpayments in India. We lookforward to helping Flipkartto deliver compelling experi-ences to users throughout In-dia, and to contribute to thedevelopment of the internetecosystem there,” said Mar-tin Lau, president of Ten-cent. Flipkart owns PhonePe,a UPI-based payments plat-form.

Post its acquisition, eBayIndia will be reporting toFlipkart’s CEO KalyanKrishnamurthy, an ex-eBayexecutive who was handed

over the baton at the onlineretail firm in January thisyear. Krishnamurthy, whocame from Tiger Global hasbeen engineering a turn-around at Flipkart startingfrom its annual festive salelast year in October when itpipped Amazon in grosssales.

“The combination ofeBay’s position as a leadingglobal e-commerce companyand Flipkart’s market staturewill allow us to accelerate andmaximize the opportunityfor both companies in India,”said Devin Wenig, presidentand CEO,eBay Inc.

eBay has a small share-holding in Snapdeal, an in-vestment that hasn't workedout while their own India op-erations never really took off-.Coming in even at this valua-tion holds promise for eBayconsidering the potential ofthe Indian e-commerce mar-ket is still huge, said peopletracking the space.

Binny Bansal, CEO of theFlipkart group, comprisingMyntra, Jabong and Pho-nePe, said in an internal mailto the company employeesthat the valuation of the firmremains healthy and in dou-ble digits and was reflective ofthe current business and theglobal economy. “While thisfunding provides the fuel, weneed to reach that goal, wehave to continue growing ourbusiness with careful consid-erations to costs," he cau-tioned

Prior to this, Flipkart hadraised $3.4 billion from inves-tors such as Tiger Global,Naspers, GIC of Singapore,Qatar Investment Authorityand Yuri Milner's DST acrossmultiple financing rounds.

Flipkart faced a series ofvaluation markdowns

Total $4.8bn Flipkart has raised is equal to cumulative cash reserves of highly

profitable 33-year-old Infosys

The money is enough to construct 3,000km of rail track, which is more than what Indian Railways constructed all of last fiscal year

Indian ports and ship-ping sector has seen only $2.65bn investment in the last three years

FUND-RAISES MATCH INFY’S RESERVES The money is enough to

construct a 3,000km long, six-lane, access-controlled expressway which can connect Kanyakumari to Chandigarh

If you consider a two-lane national highway, you can build 15,000km — equal to constructing along the country’s coastline twice over

In the last three years, India has constructed around 5,700km on an average

�Continued from P 1

BIG MOP-UP

New Delhi: India’s appetitefor fuel grew at a sedate 5% in2016-17 against a blistering11.5% in 2015-16 as demand fordiesel, one of the indicatorsof economic activities, roseat a slower pace than earlier.

Demand for fuels andother petroleum products ro-se to 194.2 million tonnes(MT) in 2016-17, up from 184.6MT in 2015-16, according to la-test data put out by the Petro-leum Planning and AnalysisCell, the oil ministry’s mar-ket tracker.

Demand for diesel, themost consumed fuel in the co-untry, grew by 1.8% to 74.6 MTin 2016-17 against consump-tion growth of 7.5% in 2015-16.

In the last fiscal, LPG (li-

quefied petroleum gas, whichis also supplied as cooking fu-el to households) sales rose by9.8% to 19.6 MT as govern-ment expanded the consu-mer base in the domestic sec-tor by 3 crore households, in-cluding 2 crore to poor homesunder the Ujjwala scheme.

Petrol consumption wasup 8.8% to 21.84 MT on theback of rise in two-wheelerand car sales. Jet fuel saleswere up 12% at 6.2 MT.

But kerosene demand de-clined sharply by 21% to 6.8MT as government restrictedsupply of subsidised fuel on-ly to the needy. Also, LPG re-placed it as a cooking fuel inmany households, particu-larly in rural areas.

During March, overall fu-el demand fell 0.6% to 17.35MT. Petrol sales were up 2.9%at 2.1MT but diesel consump-tion showed a marginal 0.3%rise at 6.8 MT. LPG demandtoo was up only 1.9%, whilekerosene sales fell by 26% to414,000 tonnes. Demand fornaphtha, an industrial input,rose 1.8% to 1.14 MT, while sa-le of bitumen, used for ma-king roads, was 12.2% lower.Fuel oil use edged lower23.4% to 567,000 tonnes inMarch.

Fuel demand growthdrops to 5% in 2016-17TIMES NEWS NETWORK

SLIPS TO SINGLE DIGIT

New Delhi: Marks & Spen-cer Reliance India on Mon-day appointed James Mun-senas the newMD replacingVenu Nair.Munsen, whowill take char-ge from May,joined the Bri-tish retailer in the UK in 2006.In 2011, he became Marks &Spencer Reliance India’s retail head and later was ap-pointed MD of the Czech Gro-up with responsibility for 48stores.

Nair will be leaving M&Slater this month to join Trent,the retail arm of the Tata gro-up, as chief commercial offi-cer. Munsen will be respon-sible for continuing to growMarks & Spencer’s joint ven-ture with Reliance Retail. TNN

M&S namesMunsen as

India ops MD