The Hindu : Business : Subhiksha to increase retail outlets

Online edition of India's National Newspaper
Saturday, Jul 15, 2006

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Business

Subhiksha to increase retail outlets

Special Correspondent

Rs. 300 cr. expansion planned; 450 stores to be added across the country

NEW DELHI: The Chennai-based discount retail chain Subhiksha on Thursday announced a Rs. 300 crore expansion plan to venture beyond its home base of Tamil Nadu by setting up nearly 450 stores in the National Capital Region and four other states besides entering the telecom segment by retailing handsets and phone connections.

"As part of expansion, the company plans to increase the number of stores to 600 from 150 now by March 2007 to create national footprint," Managing Director of Subhiksha, R. Subramanian, said while going public with the company's plans at a press conference here.

Besides Delhi, the company proposes to open stores in Maharashtra, Gujarat, Andhra Pradesh and Karnataka. In the National Capital Region, the company will open 145 stores of which 120 will be operational in the next eight weeks.

For the Delhi market, the company has earmarked an investment of Rs. 100 crore over the next two years.

Subhiksha had already tied up the fund for expansion through equity and debt.

At present, ICICI Venture is the only venture fund that has invested in the company.

"Between 2000 and 2005 ICICI Venture has invested Rs. 50 crore for a 24 per cent stake," Mr. Subramanian said.

About the future plans, he said the company would come out with an initial public offer when it had achieved a size of around 1,000 stores. The company has been making profit for the last eight years, and its revenues have grown 25 per cent in the last two years.

The company earned revenue of Rs. 330 crore with a profit of Rs. 10 crore last year. Every store on an average had a billing of Rs. 3.50 crore. The expansion would add around Rs. 1,575 crore to the topline, he said.

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