Bata India plans Rs 100-crore capex

With this the company aims to keep inset on bonus issue and share split

Bata India Ltd is planning to upgrade three of its factories in West Bengal, Bihar and Karnataka and set up about 100 new stores this year, for which the company has chalked out a Rs 100-crore capital expenditure (capex) plan.

“This year, our capex plan is about Rs 100 crore, which includes upgrading plants and setting up new stores,” Uday Khanna, chairman and independent director, Bata India, told reporters after the annual 80th general meeting of the company. Last year, Bata India had opened 189 new stores in metro, tier-I and tier-II cities. Migrating to the large store format, the company relocated or closed down about 60 small stores in 2012. At present, Bata runs about 74 small stores, which needed to be either upgraded to bigger stores or shut down, said Khanna.

Over the next few years, the company would focus on women footwears, which globally form a major part of shoe sales, said Khanna. Bata recently launched a new brand, Sundrop, a premium range of footwear for women.  

“Going forward, our focus will be on ladies’ shoes. We would look to have stand-alone ladies footwear concept stores in the next 18 to 24 months,” said  , Rajeev Gopalakrishnan, group managing director, emerging markets and India, Bata. At present, the product mix of Bata in India comprises 40 per cent of men’s  and 25 per cent women’s footwear. The remaining 35 per cent being constituted by children shoes, sports shoes and accessories. The company expected a year-on-year growth of 30 per cent in the ladies segment, while maintaining an overall growth at 20 per cent, said Khanna.

This apart, Bata is also planning to merge two of its subsidiaries — Bata Properties Ltd and Coastal Commercial and Exim Ltd — with itself over the next few months.

Stock split and Bonus (INSET)

Bata India may consider would also consider the option of stock split and issuing bonus shares at an “appropriate time,” said Khanna.

“With the competition increasing, we are going to set up new stores and modernise our plants. If we continue to grow this way, there will be more cast flows and then we can service the shareholders, we consider bonus issue. If the stock price of Bata continues to rule high and if we get sustainability at that, we can consider a stock split at appropriate time,” said Khanna.

The option of stock split and bonus issue was not on immediate agenda of the board of the company, added Khanna.

Shares of Bata India closed at Rs 864.15, up or 6.61 percent on BSE today, while the benchmark Sensex lost 0.33 per cent to 19,545.78.