LOOKING to capitalise on the retail boom in the country, National Textile Corporation (NTC) is planning to float a joint venture with the Kishore Biyani-owned Pantaloon Retail (Future Group). The public sector company, which has been unlocking value by selling surplus land across states, is now planning to hive off its retail business into a separate company.
The proposed JV, which would take over the retail business, would be a standalone venture. Although NTC may have a majority stake in the company with 51% holding, the management control of the JV would be vested with the private sector partner, sources in the know said. NTC has recently joined hands with several private sector players, including Alok Industries, Bhaskar Industries and Pantaloon to leverage its mill land assets.
When contacted about the possibilities of such a tie-up, Pantaloon Retail managing director Kishore Biyani said, “As we are partners now, we are talking about every possibility”.
NTC has 113 retail outlets across the country, including those in the prime locations of Delhi, Mumbai, Kolkata and Chennai. Most of these have been developed on self-owned land. This would work as an added advantage to the JV partner, who would otherwise have to fork out huge sums on rentals alone. Retail space in prime locations have come to cost a significant amount for retail companies hoping to cash in on the boom.
“We have some plans for our retail business also,” NTC chairman K Ramachandran Pillai said. He, however, added that it would be too premature to say anything at this moment as the company is pre-occupied with the five JVs it has formed with the private players for the revival of its Mumbai and Aurangabad mills. “We would start the initiative towards revamping our retail business once all the formalities of the existing JVs are over,” Mr Pillai said.
NTC is presently in the process of formulating a different corporate strategy to position itself strategically in the Indian textile space. The JV initiatives are part of the company’s new gameplans. The Board for Industrial and Financial Reconstruction (BIFR) has already approved the company’s reconstruction plans which includes possible mergers and demergers and joint ventures.
A group of ministers (GoM), constituted to look into the matter, has allowed JV partnership for the mills. It is expected that the JV partnership for the company’s retail plans would be on the lines of the existing one where the private partner would have the management control but NTC would have majority in the board of directors.