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Thursday, September 21, 2006

Subhiksha plans IPO on reaching 1,000 stores

Discount retail chain Subhiksha is looking to grow to a 1,000 outlets in the next one-year. Currently it has a business plan for a 600 store national roll out in five states at an outlay of Rs 300 crore that the company hopes to complete by March 2007, reports DNA.

“But we don’t have a choice,” says R Subramanian, MD of the 10-year-old chain, which has sales of Rs 330 crore (Rs 3.30 billion) from 140 stores operational in Tamil Nadu. And clearly, the acquisition route is definitely on the cards though Subramanian would not like to emphasise too much on the strategy.

And market talk has it that Subhiksha is the frontrunner for taking over the retail business of the Adani group in Gujarat. Though he refused to either confirm or deny talk of talks between the two groups, Subramanian said something could be expected in a week’s time on the acquisition front.

The retail business of the Adanis could be around Rs 110 crore (Rs 1.10 billion) if one were to take into account the three formats that the group in into, Subramanian said.

Adani Retail had in the past denied its business was on the block though it was in the midst of a restructuring exercise. For Subhiksha, the 1,000 stores milestone is important considering that is the time when the group would like to go public, Subramanian said.

He, however, also denied reports of talks with Reliance Retail stating the group would not like to have truck with a competing retail chain.

Subhiksha will invest Rs 40 crore (Rs 400 million) in Andhra Pradesh where it will open 80 stores in two cities over the next four months.

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