Bharti Wal-Mart to go on with launch plans amid slump

Despite the US economy slowdown, the Bharti Wal-Mart joint venture plans to start its business-to business (B2B) wholesale cash-and-carry stores in Punjab in the first quarter of 2009. The managing director and CEO of Bharti Wal-Mart India Pvt Limited, Raj Jain, said that despite the difficulties of economic meltdown, there was no change in the plans and the stores will be rolled out from Punjab.

Talking to FE, Jain said, “We are committed to start this venture of carrying out wholesale stores and we have already opened a distribution centre near Chandigarh which will cater to facilities located within the distance of 100-150 km. If need arises then more distribution centres will be opened. The distribution centres will service both the cash-carry stores as well as large retails like Bharti Retail. Besides, we have already announced membership registration for selfservice cash and carry stores by bonafide business owners in Punjab and between 50,000-60,000 owners are expected to get registered.”

A typical cash-and-carry store will stand between 50,000 to 100,000 sq ft and will sell a wide range of fruits, vegetables, groceries, footwear, clothing and other merchandise items. The joint venture is expected to open 10-15 stores in seven years and will employ over 5,000 people.

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Idea Changes Spice Life

One of the early starters in the GSM mobile space but restricted to regional operations, the B K Modi-controlled Spice Communications on Wednesday was acquired by Idea Cellular of the AV Birla group for Rs 2,716 crore.The acquisition price is almost Rs 665 crore more than the market price. The closing price of the share was Rs 72.15 on the Bombay Stock Exchange on Wednesday. The Spice Communications scrip surged by 33% after the announcement. The company has a market capitalisation of Rs 4,9991 crore. Idea Cellular's scrip gained a 2.09% on the BSE, to close at Rs 102.05.

The development signifies that in the booming telecom sector there's no room for companies with limited operations,restricted to a few circles. Spice operates in Punjab and Karnataka circles.

Idea has acquired the Modi family's stake of 40.8% in Spice at Rs 77.30 a share, much above the expected Rs 62 a share.Idea said it would merge Spice with itself through a share swap where Spice shareholders would get 49 Idea shares for every 100 Spice shares held. It will also pay an additionalRs544croretoModi as non-compete fee.

The acquisition of Spice would give Idea straightaway two existing circles of Punjab and Karnataka with a subscriber base of 4.4 million.Currently, Idea is present in 11 circles and has a user base of over 26 million. It has licences for there mining circles.

Further, Idea along with Telecom Malaysia International (TMI), which holds 39.5% stake in Spice, would make an open offer for additional 20% stake in Spice at the same price at which Idea has bought the Modi family's share.

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