Not only has it embarked on a plan to expand its footprint beyond Tamil Nadu to five other states, over the next year, but is also open to acquisitions and equity infusion.
NEW DELHI: Grocery and pharma discount chain Subhiksha is mulling several options for growth. Not only has it embarked on a plan to expand its footprint beyond Tamil Nadu to five other states, over the next year, but is also open to acquisitions and equity infusion.
Managing director R Subramanian says the company has chalked out plans to invest Rs 300 crore over the next one year, by when there will be 600 Subhiksha stores across the country. And while he denies any plan for equity infusion, market sources confirm that the chain has held preliminary discussions with Reliance Retail for a possible joint venture. Such a JV will mean funds infusion for Subhiksha and a readymade retail infrastructure for Reliance in the southern part of the country.
Sources also indicate that the Chennai-based retailer is looking at inorganic growth and has evinced interested in acquiring Gujarat-based retail chain Adani Retail for expanding its footprint in that state.
Contacted, Adani Retail CEO Devang Desai has acknowledged that his group is in the midst of restructuring but denied any plan to offload stake in the retail venture.
At present, 24% equity stake in Subhiksha rests with ICICI Ventures. Subramanian says funding of the mega expansion plan has already been tied up through debt and promoter fund infusion.
On the much-delayed plans to come out with an initial public offer, he says there is no plan to go for an IPO immediately as the funding is more or less in place. “An IPO will make sense as and when ICICI Ventures wants an exit option. Anyway, it takes only a couple of months to prepare for one and we would like to consider going public only when the markets are conducive.”
Subhiksha posted sales of Rs 334 crore last fiscal, with a net profit of about Rs 10 crore. ICICI Ventures has invested Rs 50 crore in it till date.
Subramanian said the company would open 145 stores over the next 12 months in Delhi alone. The chain is also foraying into Maharashtra, Andhra Pradesh, Gujarat and Karnataka during this period.
...may take the telecom call
Ashish K Tiwari
MUMBAI: In a bid to capitalise on the telecom boom, Subhiksha, the country’s largest discount retail chain, is serious contemplating adding a telecom vertical to its current offerings.
Coinciding with its launch in north India, expected by August this year, the Tamil Nadu-based retailer will allocate an average 100 square feet of space within the 145 Subhiksha outlets to be launched in Delhi and the National Capital Region.
Atul Joshi, senior president, Subhiksha Trading Services Ltd, could not be contacted despite repeated attempts. However, a highly-placed company official did confirm the addition of the telecom vertical.
“The management is in the process of designing a concept for the telecom vertical. It should be unveiled when it gets closer to the launch,” said the official.
The new vertical will look at retailing an entire range of telecom products including handsets and accessories. “It certainly will be more than just an over-the-counter retail space,” the official said.
The management though is yet to decide on the pricing of the products. “Discounted rates have been our unique selling proposition and there is no reason why it should not be extended to the telecom vertical. However, a final decision on the same will be taken near to the launch,” the official said.
With close to 4.8 million telecom subscribers being added across the country every month, telecom retailing is becoming a very lucrative business.
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