25/02/2008 (The Hindu Business Line) - The Future Group is all set to make a foray into rural retailing by riding on the Aadhaar outlets belonging to Godrej Agrovet. The group intends to pick up a majority stake in a separate joint venture company to be floated by itself and Godrej Agrovet, to enter into yet another retailing format.

A Future Group official told Business Line, “There would be a SPV (special purpose vehicle) floated to enter into a joint venture with Godrej Agrovet. The stake holding of the Future Group would be split among a couple of its companies including its newly listed entity Future Ventures.”

The multiple Future Group companies that are expected to pick up stake would form the majority stakeholders in the new joint venture.

While Aadhaar would give the Future Group the necessary footprint into rural retailing, it would also help the group in gaining from the combined sourcing strengths of agricultural commodities and thereby reducing its gross margins in the business. “With the help of this joint venture company we would be able to add and expand our core retailing operations. Several synergies would get exploited as a result of this venture and this would include strengthening of our sourcing capabilities as well as building the private label business in this format,” the official added.

In fact, Future Brands — the Future Group company entrusted with its private labels — would come into play as it would help the joint venture company in building its private label business further. When contacted Mr Balram Yadav, Executive Director, Godrej Agrovet, said: “We cannot confirm or deny at this stage about the joint venture and are likely to take a decision in the next 15 days.”

Currently, there are 65 Godrej Aadhaar stores operating in States such as Punjab, Haryana and Maharashtra offering multiple categories ranging from agri products, consumer durables, apparel and FMCG products. The stores have also forged alliances with companies such as ICICI Prudential, Apollo and Fortis as well as BPCL and HPCL petrol pumps to give an impetus to its retailing operations.

Meanwhile, Godrej Agrovet is also said to be scouting for partners for its gourmet retailing stores under Nature’s Basket. Sources close to the company indicated that there have been talks with a couple high-end gourmet retailers, both Indian and international, who could help in expanding the niche and high-end retailing business further.