Walmart to expand network, brings in Rs 623 crore funds

New Delhi | Mumbai: Walmart Stores infused more funds into its Indian cash-and-carry operations in June to expand the network, taking the world number one retailer's total investment in the country to nearly Rs 2,000 crore and underscoring its renewed optimism about business prospects in the country.

Funds amounting to Rs 623 crore were allotted as share application money by the parent company in June, according to a company resolution submitted to the Registrar of Companies on July 16.

Walmart India, the local entity registered in January, had earlier raised a cumulativeRs 1,328 crore from its USbased parent. This is the second large capital infusion by Walmart after its October 2013 separation from Bharti Walmart when the company acquired the 50% stake held by the Indian partner to go solo with the cash-and-carry venture.

In its latest annual report released mid April, Walmart said it paid a total $334 million (Rs 2,018 crore at current rates) to end its high-profile retail partnership with Bharti Enterprises, resulting in a net loss of $151 million (Rs 912 crore) accruing to the US company's consolidated income in 2013.

The retailer paid $100 million (Rs 604 crore) to acquire Bharti's stake in its India wholesale joint venture to convert it into a fullyowned subsidiary. Walmart said it also took a $234-million (Rs 1,414-crore) hit that included debt and other investments in back-end partner Bharti Retail that it waived as part of the October 2013 separation. Walmart said the latest infusion would be used to run and expand the current business.

"The equity infusion is to fund our working capital and capex requirements of our cash-and-carry business in India," Krish Iyer, CEO of Walmart India, said in an e-mailed reply.

In a June interview with ET, Iyer had cited a McKinsey & Co report that identified India's current wholesaling business as a $300 billion opportunity and that the market was expected to swell to $700 billion by 2020.

Walmart currently operates 20 Best Price wholesale stores in India but the business had stalled for two years amid an internal probe to find out if the local unit had in any way flouted US anti-bribery laws while operating in the country. Also, several executives left the company amid the probe and following the separation from Bharti.

Now, Walmart says it's ready to roll out more stores in the coming months. Walmart India also plans to expand the e-commerce initiative that is currently being piloted in Lucknow and Hyderabad, which involves existing wholesale members ordering online and products being delivered at their doorstep.

"We have received a very encouraging response for our pilot project on B2B e-commerce initiative in Lucknow and Hyderabad and we hope to extend this virtual shopping opportunity to our members in all our stores in next few months," said Rajneesh Kumar, a spokesperson for Walmart India.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.