Tata’s Infiniti eyeing stake in retailer Vivek

Tata’s Infiniti eyeing stake in retailer Vivek

Bangalore: The Tata group’s retail arm, Infiniti Retail Ltd, is in talks to potentially buy a stake in Vivek Ltd, a Chennai-based company that runs one of India’s largest consumer electronics store chains, according to one person familiar with the development who did not wish to be identified.

This person said the talks revolve around Infiniti potentially acquiring a 35% stake in Vivek that is currently valued at around Rs595 crore.

Ajit Joshi, CEO, Infiniti Retail, said the company didn’t “want to comment". He would only say that “we keep talking to a number of industry players" for possible acquisitions.

B.A. Srinivas, joint managing director of Vivek, said the company was indeed “looking for funds to add another 100 stores in the next three years to our existing 54 stores". But, he said, the money would come from “private equity" and that Vivek would also consider an initial public offering of shares “two years down the line".

He declined to comment on any talks with Infiniti or a possible stake sale to any other arm of the Tata group. Mint couldn’t independently ascertain the potential deal talks.

If the talks lead to a transaction, it could give Infiniti’s Croma chain of consumer electronics stores a head start over emerging rivals such as Reliance Retail’s Reliance Digital and the Future Group’s eZone. Croma, launched in October 2006, has 10 stores across the country.

The same person familiar with the talks said if a deal went through, Infiniti would position Croma as a chain for high-end products, such as LCD televisions and home theatres, and sell low-end products, including home appliances, through Vivek’s stores.

Vivek operates through three retail brands Viveks, Jainsons and Premier. It also has a few associates, including Vivek Hire Purchase and Leasing, which finances purchases of consumer electronics products, and Viveks Lockers, which rents out safe deposit lockers in Chennai. The firm said it ended 2006-07 with revenues of Rs360 crore.

The Indian consumer electronics and home appliances market is valued at Rs25,000 crore annually, according to some industry estimates.

However, barring Vivek in South India and Vijay Sales Agencies in West India, there are hardly any firms that operate branded consumer electronics store chains of any significance. It is this gap that has attracted deep-pocketed conglomerates such as the Tatas and Reliance Industries Ltd to the category.