7/16/2015 Thedeepdiscountmodelfollowedbyetailersisunsustainable:KumarMangalamBirla|ETRetail

http://retail.economictimes.indiatimes.com/news/industry/thedeepdiscountmodelfollowedbyetailersisunsustainablekumarmangalambirla/48048051 1/3

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Thedeepdiscountmodelfollowedbyetailersisunsustainable:KumarMangalamBirlaThedeepdiscountmodelfollowedbyIndianretailersisunsustainableandwillcometoanendsoonerorlaterasinvestorswilldemandreturns,saidBirla.

BaijuKalesh ,BodhisatvaGanguli & RSriram |

MUMBAI:ThedeepdiscountmodelfollowedbyIndianretailersisunsustainableandwouldcometoanendsoonerorlaterasinvestorswouldsurelydemandreturns,AdityaBirlaGroupChairmanKumarMangalamBirlahassaid,whilecallingforalevelplayingfieldforbrickandmortarretailers."Iwonderhowthe(ecommerce)businesscanbesustainable.

Iunderstandthevaluationplay.Attheendofthedaythefinancialinvestorwillhavetomakereturns.OnethingIamsureisthatyoucan'thaveunlimitedaccesstocapitalfunding.Thereforethequestionthatcomestomymindiswhetherthedeepdiscountmodelissustainable,"Birlasaidinanexclusiveinterview.Speakingforthefirsttime

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13July2015,7:58AMIST

7/16/2015 Thedeepdiscountmodelfollowedbyetailersisunsustainable:KumarMangalamBirla|ETRetail

http://retail.economictimes.indiatimes.com/news/industry/thedeepdiscountmodelfollowedbyetailersisunsustainablekumarmangalambirla/48048051 2/3

aboutthecontroversywhichembroiledthegroupafterCBIregisteredanFIRinOctober2013namingthe48yearoldindustrialistasanaccusedinacaselinkedtoallocationofacoalmine,Birladescribedtheepisodeasa"shock"butassertedthatthegrouphadbouncedback.

"Itwasashockandwascompletelyunexpected.Butitdidnotcomeinthewayofourgrowthaswearearesilientgroup.Itisbestnottogetemotionalaboutthesethings,"Birlasaid.

Askedifheascribedthecasetopoliticalvendetta,Birlarepliedinthenegative.Hedeclinedtodiscusstheaffairindetailasitissubjudice.InAprilthisyear,theSupremeCourtstayedalowercourtordersummoningBirlaandformerprimeministerManmohanSinghasaccused.

BirlapraisedtheeffortsoftheNarendraModigovernment,emphasisingthatoneyearwasnotenoughtojudgeitseffectiveness."Whenyougetabusinessoracompanythatisailing,Idonotthinkturningitaroundinoneyearisrealistic.Ihavealotoffaithinthisgovernment.

Theyunderstandissueswell.Mysenseisthattheyaredoingalotofworkwearenotawareof.Twosectorshavetakenoffoneiscoalintermsofproductionofcoal.Forthefirsttimeinmanyyears,wearenotstrugglingandhavesufficientcoalinourplants,whichisaverybigdeal.Roadshavetakenoff,whichisbig,"hesaid.

Inthenextfewyears,the$41billiongroupwillinvestmoreinitsnoncommoditybusiness,includinga$7billioninvestmentinIdeaCellular,India'sthirdlargesttelecomcompanybynumberofsubscribers.ThegroupalsoplanstoenterthehealthinsuranceandhousingfinancesectorsandsetupapaymentbankifgrantedalicencebyRBI.FurtherthegroupwouldbuildoutitsNBFCaswellasitsgarmentbusiness,thelatterthelargestinIndia.SunLife,thegroup'spartnerinthefinancialservicesbusiness,wouldraiseitsstateinthelifeinsuranceventureto49%bytheendoftheyear.Ingeneral,thegroup'spreferencewouldbetostayawayfromsectorsheavilydominatedbythegovernment,thoughthereareexceptionssuchasIdea.Thegroupwouldalsoforayintogenerationofsolarpower,oneoftheprioritiesoftheNDAgovernment.

Theemphasisonnoncommoditiescomesonthebackofa$26billioninvestment,muchofitintheareasofcementandaluminum.

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7/16/2015 Thedeepdiscountmodelfollowedbyetailersisunsustainable:KumarMangalamBirla|ETRetail

http://retail.economictimes.indiatimes.com/news/industry/thedeepdiscountmodelfollowedbyetailersisunsustainablekumarmangalambirla/48048051 3/3

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