Caladium Investment Pte. Ltd. — Combination C-2022/07/949

COMPETITION COMMISSION OF INDIA 30.08.2022 Notice under Section 6(2) of the Competition Act, 2002 filed by Caladium Investment PTE. Ltd

CORAM: Mr. Ashok Kumar Gupta Chairperson

Ms. Sangeeta Verma Member

Mr. Bhagwant Singh Bishnoi Member

Order under Section 31(1) of the Competition Act, 2002

1. On 05.07.2022, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act) given by Caladium Investment Pte. Ltd (Caladium/GIC Investor). The notice has been filed pursuant to the Securities Subscription Agreement (SSA) executed by and between Aditya Birla Fashion and Retail Limited (ABFRL/Target) and Caladium on 24.05.2022.

2. The proposed transaction relates to acquisition of approximately 7.49% shareholding on a fully diluted basis in ABFRL by Caladium by acquiring (i) equity shares to be issued and allotted by ABFRL on a preferential basis and (ii) warrants, each convertible into 1 (one) equity share to be issued and allotted by ABFRL on a preferential basis (Proposed Combination). It is also submitted that, as a result of the Proposed Combination, the GIC Investor will, inter alia, acquire the right to nominate a non-executive director on the board of ABFRL who shall be liable to retirement by rotation and shall be eligible for re-appointment, in accordance with applicable law, (Hereinafter, Caladium and ABFRL are collectively referred to as Parties.)

Combination Registration No. C-2022/07/949

3. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to transaction of business relating to combinations) Regulations, 2011 (Combination Regulations), the Parties were required to provide certain information(s)/clarification(s) vide the Commission’s letter dated 20.07.2022, inter alia, relating to the Proposed Combination; response to the same was received on 03.08.2022. In order to carry out the competition assessment of the Proposed Combination, certain clarifications/information(s) were also sought, responses to which were received on 12.08.2022 and 20.08.2022.

Parties to the Combination

GIC Investor 4. GIC Investor is wholly owned by Lathe Investment Private Limited (Lathe) which, in turn, is a whollyowned subsidiary of GIC (Ventures) Private Limited (GIC Ventures). GIC Investor is a special purpose vehicle (SPV) organized as a private limited company in Singapore that is part of a group of investment holding companies managed by GIC Special Investments Private Limited (GICSI).

GICSI 5. GICSI, which manages investments in private equity, venture capital and infrastructure, was set up as the private equity and infrastructure investment arm of GIC Private Limited and is wholly-owned by GIC Private Limited. Both GIC Ventures and GICSI are wholly-owned by the Minister for Finance, a body corporate established under Section 2(1) of the Minister for Finance (Incorporation) Act, Chapter 183 of Singapore.

ABFRL 6. ABFRL is a listed public limited company incorporated in India and is a part of the Aditya Birla conglomerate. It has been submitted that ABFRL is primarily engaged in business activities within India. ABFRL is engaged in the manufacture and retailing of branded apparel, footwear and accessories (AFA) and operates across India through its retail stores, as well as distribution through online retail platforms including sale of AFA on e-commerce marketplaces such as Amazon, Myntra, Tata Clique, Ajio, and Flipkart, etc. Identification of Overlaps, Relevant Markets and Competition Assessment

Combination Registration No. C-2022/07/949

7. It is submitted in the notice by the Parties that there are no direct horizontal overlaps and no direct vertical and/or complementary relationships between the Parties to the Proposed Combination. GIC Investor is not directly engaged in any activities that can be considered as overlapping with those of ABFRL and has minority investments in entities whose businesses could be considered to overlap with the activities of the ABFRL. However, it is submitted that the GIC Overlapping Portfolio Companies provide products/ services that may be substitutable with the products/ services offered by ABFRL in India (i.e., B2B and B2C sales of products in India).

8. Further, it is submitted ABFRL (including through its subsidiaries) is engaged in the manufacture and sale of AFA products and also sells jewelry, home décor & furnishing products, in the overall market for retail sales in India, both directly to end-customers, online and offline, and indirectly through B2B intermediaries, such as wholesalers/distributors, who sell them onwards, both online and offline.

9. The Parties submitted that the following relevant markets may be considered for the purpose of competition assessment of the Proposed Combination, viz., (a) the Broad Relevant Markets for the “market for B2B sales in India” and “market for B2C sales in India” (Broad Relevant Markets); or (b) the Narrow Relevant Market the “market for B2B sales of AFA products in India” and “market for B2C sales of AFA products in India” (Narrow Relevant Markets).

10. It is noted that the Relevant Markets identified by the Parties may be further sub-segmented in the narrower segments of: (i) Apparels, (ii) Footwear and (iii) Accessories (Narrower Segments of AFA), for the purpose of identification of overlaps, considering that the products under each Apparels, Footwear and Accessories are not substitutable. Accordingly, the Parties were required to provide the relevant details in the Narrower Segments of AFA.

11. The Commission decided to leave the exact delineation of the relevant market open, as it is observed that the Proposed Combination is not likely to cause an appreciable adverse effect on competition in any of the possible alternative relevant markets that could be delineated.

12. Based on the submissions of the Parties, it is noted that the combined market share of the Parties is minuscule in each of the Broad Relevant Markets and Narrow Relevant Markets. Further, in Combination Registration No. C-2022/07/949 the Narrower Segments of AFA, it is noted that the combined market share of the Parties is miniscule in Apparel and Footwear categories and is in the range of (5-10) percent in Accessories. Further, based on the submissions of the Parties, it is noted that the incremental market share is minuscule in each of the Narrower Segments of AFA, and there are other players such as in: (i) Apparels Segment: Raymond, Page Industries, Trent, Arvind Fashions; (ii) Footwear Segment; Relaxo Footwear, Bata India, Puma Sports, Campus; (iii) Accessories; Raymond, Arvind Fashions, Levi Strauss India, Benetton India, who will continue to pose competitive constraints to the Parties post the Proposed Combination.

13. Considering the material on record, including details provided in the Notice given under Section 6(2) of the Act and assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have any appreciable adverse effect on competition in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

14. This order may be revoked if, at any time, the information provided by the Parties is found to be incorrect.

15. The information provided by the Parties’ shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

16. The Secretary is directed to communicate to the Parties’, accordingly.