Shoppers' Stop to open 11 more stores
Shoppers’ Stop Ltd, one of India's leading retailers, has drawn up plans to open 11 more stores in the next 24 months in Bangalore, Mumbai, Delhi, Pune, Noida (UP) and Hyderabad, which would take the total area to 1,418,247 sq ft. The company also intends to utilise part of the proceeds from its IPO for renovation and expansion of its existing stores.
The company hopes to increase its space from 0.75 million sq ft now to about 2.5 million sq ft by 2008, said B S Nagesh, its managing director and CEO, in
Chennai.
It is entering the capital market with its maiden public offering of 6,946,033 equity shares of Rs 10 each for cash at a premium to be decided through a 100 per cent book-built process. The price band has been finalised between Rs 210 and Rs 250 per equity share. The issue opens for bids began on April 27 and closes on May 3.
Of the fresh issue of 6,946,033 equity shares, which would form 20.21 per cent of the fully diluted post-issue, paid-up capital of the company, the promoters would contribute 1,190,477 equity shares and 200,000 equity shares have been reserved for employees. Of the net offer to the public, 60 per cent or 3,333,334 equity shares have been reserved for allotment on a discretionary basis to qualified institutional buyers and 833,333 shares constituting 15 per cent of the net public offer has been reserved for non-institutional investors. The balance 25 per cent of the net offer 1,388,889 equity shares would be allotted on a proportionate basis to retail investors.
Shoppers' Stop, a pioneer in setting up nationwide chain of large format department stores in India, has been promoted by K Raheja Corp Group (Chandru L. Raheja Group), one of the leading groups in the business of real estate development and hotels in the country. The retail chain has grown from a single store in Mumbai, with an area of 2,800 sq ft, to 17 locations across the country occupying an aggregate area of 752,848 sq ft.
The company retails a range of branded and own label apparel, footwear, perfumes, cosmetics, jewellery, leather products and accessories, home products, books, music and toys. All these are well complemented by cafe, food, entertainment, personal care and various beauty-related services.
Shoppers' Stop is a member of the Switzerland-headquartered Intercontinental Group of Department Stores (IGDS). Its loyalty programme, called First Citizen Club, currently has 410,673 members. First Citizen members accounted for about half of the sales in the year ended March 31, 2004.
For the year ended March 31, 2005, Shoppers' Stop posted a 29 per cent growth in gross retail turnover at Rs 511.15 crore, compared to Rs 395.30 crore reported in FY 2004. Net profit rose by 58 per cent to Rs 19.03 crore in FY 2005 over Rs 12 crore reported last year.
The book-running lead managers to this maiden public offer are Enam Financial Consultants Pvt Ltd, J M Morgan Stanley Pvt Ltd., Kotak Mahindra Capital Company Ltd., ICICI Securities Limited, and co-book running manager is IL&FS Investmart Ltd.
R Rangaraj
