According to K.V. Ramanand (Regional Director of Transaction Advisory Services on the retail sector in Ernst & Young), Joint Ventures, Private Equity participation and Inorganic growth (M&A's) will propel corporate activity in the Indian Retail Sector. We are seeing evidence of all three in Indian Retail. According to an interview published in Hindu, he says:

We see tremendous amount of activity in three distinct areas. First, the JVs. Indian players are set to expand and grow. In addition, there is significant amount of interest from large international players.

We have heard reports that large international players like Carrefour, and Starbucks are keen in entering this market. Tesco has already expressed its intent. The Australian retail major Woolworths is rapidly finalising strategies for an Indian retail foray.

They may enter the Indian market either directly or through JVs with local partners. Large Indian entities with sustainable strategies are keen to align with these global names. There are bound to be hectic parleys between the international players and domestic entities in finalising JV strategies.

The second area of buzz is PE. We have PE capital abundantly, and it is pursuing good investment options in this rapidly growing market. There are different types of transactions in this space.

In addition to minority investments, there are multiple incidences where the PE funds took controlling or significant minority stakes like Navis did when they invested into Nirulas.

Besides, within the retail space, niche opportunities like Flemingo Duty Free Shops also attracted serious interest and Citicorp invested funds in it. Similarly Digital Shoppy attracted investments from IL&FS Investments. We believe this is just the beginning and there is substantial interest and scope for investment in good retail sector deals.

Thirdly, the inorganic route, the ultimate resort for any player that wants quick growth. Reliance acquired the retail business of the Adani Group to quickly ramp up its operations. The AV Birla group made a similar entry in the F&G retail segment through the acquisition of Trinethra. Incidentally, a PE fund along with the promoters had an exit in this transaction.