Reliance may have an edge in race for Metro India

The final bids for buying Metro Cash & Carry's India operations and assets will likely be submitted by the end of this month, said two industry executives aware of the development.

As of now, Reliance Industries and Thailand's largest conglomerate, Charoen Pokphand (CP) Group, are in the fray though it is likely to become tilted in favour of the Indian conglomerate, they said.

One of the people said while the CP Group is still in the fray, there are chances Reliance may be the only one to place the final bid, which will make it an exclusive offer. "With Reliance, the deal will be a cakewalk with no pressure from domestic retail lobbies and Reliance will absorb all employees," he said.


Reliance and the CP Group have for more than seven weeks been doing the due diligence of Metro's India operations, having signed non-binding agreements in August. Earlier this year, Metro reviewed its India business and decided to exit due to the need for higher investment to compete with deep-pocketed rivals such as Reliance and Amazon.

A Metro India spokesperson said the company will not comment on rumours and market speculations. A CP Group spokesperson said it has no comment to add.

A Reliance spokesperson said the company evaluates various opportunities on an ongoing basis. "We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges," he said.

Reliance's non-binding bid to acquire Metro Cash and Carry India has been around ₹5,600 crore, while that of CP Group has been about ₹8,000 crore, or $1 billion, which almost matches the German wholesaler's expectations.

Metro had posted sales of ₹6,738 crore in fiscal 2021. It operates 31 wholesale stores in India with seven of them operating on company-owned land.

Overseas investment in offline trade has been a sticky issue despite India allowing 100% foreign direct investment in wholesale trade on a cash and carry basis, where Metro was one of the first companies to enter India in 2003. There has often been resistance from political parties and lobby groups to foreign investments in retail.

One of the people aware of the development said German parent Metro AG is concerned about the regulatory environment in India and the 'swadeshi versus videshi' debate. Lobby groups representing Indian retail companies have upped the ante against overseas retailers, alleging violation of FDI rules, which the foreign companies have always denied.

Some trade lobbies recently wrote to the government on how a few global wholesalers have been flouting FDI rules by selling to consumers directly. India's retail policy does not allow direct sales of multi-brand goods by overseas companies to mitigate the negative impact on kirana shops.