Louis Vuitton Malletier and Fendi —both part of the France-based Louis Vuitton Moet Hennessy — propose to pump in Rs 26.5 crore and Rs 32.2 crore, respectively, for buying 51 per cent equity in existing Indian companies and for scaling up operations here.
Louis Vuitton will buy into LV Trading, which already distributes its goods in India, and Fendi will buy into Fun Fashion India, promoted by Ashish Chordia and Sampat Chordia.
The only other multinational to have entered the Indian retail sector so far is Nike.
However, it has taken the indirect route by entering into an agreement with Moja Shoes to sell Nike's goods in India. Moja gets foreign direct investment from Tano India Private Equity Fund.
While Nike's application has already been cleared, the applications of Fendi and Louis Vuitton are awaiting the approval of the Foreign Investment Promotion Board.
Louis Vuitton Malletier, after picking up 51 per cent in LV Trading for Rs 1.5 crore, will invest another Rs 32.2 crore over five years.
The investment in LV Trading will be in the form of 51 per cent in the paid-up equity. It will also purchase 2,500,000 zero-coupon, redeemable, non-convertible preference shares for Rs 28.75 crore.
It will then subscribe to fresh issues of zero-coupon, redeemable, non-convertible preference shares worth Rs 1.32 crore. Fendi will invest Rs 26.5 crore in Fun Fashion India over the next five years.
After the investment by Fendi, the Indian company will work as a joint venture between Chordia Fashion and Fendi and distribute products through one of its stores in Mumbai.
Fendi plans to distribute products like ready wear cloths, bags, accessories, watches, jewellery and shoes through its store in India.
Fendi has also given an undertaking to the government that all products sold by the company in India through its store will be manufactured outside India and will be branded during manufacturing.