Single-brand FDI: Lee Cooper, Fabindia get FIPB clearance

GET SET for foreign investment-powered retail outlets hawking Lee Cooper and Fabindia. The Foreign Investment Promotion Board (FIPB) has cleared single-brand FDI in retailing of both brands. The move is significant in view of the heat over liberalisation of FDI norms, especially in the case of retail. Englandbased Lee Cooper International has also obtained permission for wholesale trading here. The approvals are expected to provide a major boost to the brand. Lee Cooper had forwarded a proposal to FIPB for subscription up to Rs 90 lakh (or 50% equity stake) in the preference share capital of Lee Cooper (India). It had also asked for a further investment of Rs 8.1 crore lakh over 24 months in the Indian venture. Lee Cooper has already brought in FDI of Rs 90 lakh under the automatic route but no activity has started so far. The Board has cleared the proposal under the guidelines provided through press note 3. Fabindia, on the other hand, has sought approval for transferring 7.5% of its equity (18,750 shares) to a Mauritius-based non-resident company, WCP Holdings. Fabindia had also proposed to issue 44,750 equity shares to its existing foreign investors Fabindia Inc of USA. After the proposes issue, NRI and foreign participation in Fabindia would increase to 51% from 39.23% It has sought approval for ‘singlebrand’ product retailing under brand name Fabindia. The government opened up single-brand retail to FDI last year and nearly half-a-dozen proposal have been cleared under this provision. Plans are afoot now to open up more areas to FDI but political opposition has stalled the move so far. Government sources said Lee Cooper India too plans to start wholesale trading business under the ‘single-brand’ segment in the fashion category. Its products will include ready to wear, denims, woven knitwear and men’s accessories. Lee Cooper International has sought approval for investing 50% in the paid-up preference share capital and 50% in the paid-up equity capital of its Indian arm.

Courtesy: EconomicTimes
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