IndiaRetailBiz

Almost after a year’s drought of capital resources, India’s retail sector appears to be returning back in reckoning of investors. This is evident from the fact that foreign investors have begun to re-look at expansion projects of Indian retailers.

Fung Capital, a private equity investment company of Fung families, has decided to invest around $30 million in the logistics and supply chain arm of Kishore Biyani-led Future group. Future Supply Chain Solutions (proposed new avatar of Future Logistic Solutions Ltd.), in return, has agreed to divest up to 26 per cent of equity stake in favour of the private equity firm.

Future Supply Chain Solutions, which presently sevices over 1,100 retail outlets, manages over 2.6 million SKUs and over 3 million sq ft of warehousing network spread over 30 centres, and handles a fleet of over 500 vehicles plying across the country, will use the newly raised capital for enhancing logistics infrastructure, strengthening technology platforms, and expanding supply chain network of the company.

“We are building a world class supply chain infrastructure for the consumption products in India which is presently very limited, despite it being a critical support required in India’s rapidly growing economy. We will be investing in physical as well as technology infrastructure that will reduce the time-to-market and cost-to-market for fashion and apparel and other consumer categories,” said Anshuman Singh, Managing Director of the company.

India’s $100 billion logistics services market, though highly fragmented as unorganised players account for over 95 per cent of the market, is growing at a fast pace of around 30 per cent CAGR.

Future Supply Chain Solutions is looking at becoming a dominant player in the third party logistics (3PL) player in the consumption segment of supply chain market. The present size of consumption segment supply chain market is estimated at around $20 billion.