Premji buys 10% Subhiksha stake

The software magnate’s interest in scooping up a small pie of India’s trillion dollar retail market will surely give a leg up to India’s retail industry, which, of late, has been buffeted by a blizzard of bad news.

Sources in the know told ET on Thursday that Premji, in his personal capacity, has cut the deal through his private investment arm, snapping up 10 per cent of ICICI Venture’s stake in the closely held retail chain.

Subhiksha Trading has an equity capital of Rs 32 crore and 10 per cent of equity works out to a meager Rs 3.2 crore. The balance — Rs 226.8 crore — has come as a humdinger of a premium for Subhiksha. Following the transaction, ICICI Venture’s stake in the retail chain has come down to 14 per cent.

In June, the retail chain, which has been looking at a listing, acquired a majority stake in a Chennai-based listed company, Blue Green Constructions and Investments.

Once it completes the listing, Premji would get a 10 per cent stake in the food and grocery discount retailer. Wipro is not new to the retail bandwagon.

Last year, the company acquired Singapore-based personal care products company Unza Holdings Ltd for $246 million in an all-cash deal. The deal was touted to give Wipro a big foothold across Asian markets in the personal care segment.

Although Premji has bought into Subhiksha on his own steam, the deal still holds significance at a time when spiralling inflation is shaking the ground beneath retailers’ feet across India.

Subhiksha promoter R Subramanian has plans to grow the company into a $5-billion entity.

At the time of acquiring Blue Green, he had told ET: “The acquisition comes to Rs 2.5 crore without any liability. Blue Green has a paid-up capital of Rs 5 crore and we will pay 50 per cent to get majority stake. Its promoters, hailing from south Tamil Nadu, had plans to launch consumer durable stores.

They had identified properties. But, it did not materialise as they could not raise funds.’’