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Delays in opening the retail sector to foreign direct investment (FDI), rising interest burden and a looming economic slowdown bode ill for Pantaloon Retail, flagship venture of the Kishore Biyani-owned Future Group. Saddled with Rs 4,200 crore debt at the end of June 2011, the company’s debt-equity ratio has touched 1.3:1, a level not seen at other retailing peers. Though Future Group plans to trim its rising debt-equity ratio by selling its stake in non-core businesses like Future Capital, analysts say any slowdown in the economy could spark trouble.
An inter-ministerial panel recently recommended allowing 51 per cent FDI in multi-brand retail, which must still be cleared by the Union Cabinet. Jagannadham Thunuguntla, head of research at broking firm SMC Global, said Pantaloon’s debt is manageable if the economy continues to grow at the current pace. India’s GDP is expected to grow at 8.2 per cent this fiscal, slightly below...
http://www.financialexpress.com/news/at-rs-4-200-cr-pantaloons-debt-in-danger-zone/842833/