Vishal Retail, a Rs 1,000-crore New Delhi-based chain, is weighing a second round of fund-raising through the QIP route to mop up Rs 200 crore.
QIP being weighed; co may also go for revenue-share, franchisee models
KOLKATA: Vishal Retail, a Rs 1,000-crore New Delhi-based chain, is weighing a second round of fund-raising through the qualified institutional placement (QIP) route to mop up Rs 200 crore.
Company sources said expansion is imperative, so if money can’t be raised via QIP, the company strike revenue-share agreements with mall developers and also sign up franchisees.
Vishal Retail is also considering expaning its small-format stores to categories such as consumer durables and footwear. These formats, of 3,500 sq ft each, may be named Vishal ‘TechnoMarts’ and ‘FootMarts’.
“When one’s own funds are squeezed, companies like to play with entrepreneurs’ funds, especially when they are willing to invest,” aid Ambeek Khemka, group president, Vishal Retail.
On the QIP route, Khemka said the market condition would drive decisions.
For the franchisee model, Vishal Retail is targeting players that own real estate or work on low rentals to keep the venture viable in times of high real estate costs.
As for the revenue-share model, the company has already signed up a few ventures.
“If we don’t get a franchisee in a potential locality, we are open to the revenue-share model. Through this route, we can save on fixed costs such as rentals and margins to the franchisee,” Khemka said.
Vishal’s current per-square foot realisation per month is at Rs 600. The immediate per square foot realisation would not be felt because of an 18% mark-up to the franchisee. Khemka, however, felt that the topline would swell eventually.
“Vishal Retail will be able to sell its stocks immediately to the franchisee and this will add to our topline,” he said.
In all, Vishal will set up 3 Mega Mart hypermarkets, 15-18 Daily Mart convenios and about 30 Fashion Marts.
m_madhumita@dnaindia.net 
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