The K Raheja Corp's 'Shoppers' Stop' is likely to take a final call by year-end to increase its stake in 'HyperCity' to 51 per cent from 19 per cent.
NEW DELHI: The K Raheja Corp's 'Shoppers' Stop' is likely to take a final call by year-end to increase its stake in 'HyperCity' to 51 per cent from 19 per cent as part of plans to make it holding company of the group's retail ventures.
The group is investing around Rs 1,100 crore for expansion to increase its retail space to six million square feet across all its retail formats in next three years.
"We have an option to buy 51 per cent in HyperCity and the board will take a decision in December," Shoppers' Stop Ltd Managing Director and Customer Care Associate B S Nagesh told.
He said the company, having acquired 19 per cent stake in HyperCity, was an indicator that it was likely to go for higher stake when there was an option.
Shoppers' Stop can buy additional 32 per cent stake by December at a price including investment cost (made in HyperCity) plus 10 per cent interest on it.
Raheja Corp has been taking steps to make Shoppers' Stop its holding company and recently it bought out ICICI Venture's 49 per cent stake in Crossword bookstores, making it a wholly-owned subsidiary of the departmental chain.
Nagesh said the group was also planning to increase current space to 6 million square feet by 2010-2011 from the current 1.6 million square feet across all retail formats, including Shoppers' Stop, HyperCity, Crosswords, Mothercare, coffee shop Brio, Desicare and others.
The current number of 22 Shoppers' Stop stores will go up to 49 and 19 new Hypercity stores were planned in next three years taking the total number to 20. While the number of stores of the other formats will go up to 250 from the current 70 stores by 2010-11, he said.
Asked about the investment planned for expansion, Nagesh said, "On an average Rs 1500-Rs 2000 is the capital expenditure per square feet of space, while Rs 500 is the working capital."
Raheja's have also launched three 'ExpressCity' convenience stores in the country and expect to set up 250 such facilities in next three years, "But the expansion plan would depend on the success of the pilot stores which we have launched, however these are not a part of the six million square feet target set up by the company," he said.
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