RPG hypermarket sets shop in Mumbai

RPG Retail, an RPG group company, is ramping up its hypermarket chain - Giant Hypermarket - to 21 in the next two years. The company opened its second store in Mumbai today.

Harsh Goenka, chairman, RPG group, said, "We are looking at 21 stores by 2006-07." The proposed expansion entails an investment of around Rs 180 crore, he said.

The company is currently weighing various options of funding for the expansions. "We may look at options such as an initial public offering or bring in a financial partner. However, currently we are not in need of funds and any further decision in this direction will be taken only by the end of this calendar year," Goenka said.

Goenka further added that if the company does decide on an IPO, around 20 per cent of the equity will be diluted.

The company is looking at having a footprint in 12 cities across the country, with multiple stores in some cities.

Raghu Pillai, chief executive officer, RPG Retail, said, "We have finalised the deal at 17 locations as on date, while negotiations are still on at another 4-5 locations."

The first Giant hypermarket was opened in Hyderabad in July 2001, which is expecting an annual turnover of around Rs 88 crore this year. The next Giant hypermarket to be opened would be at Vizag in June this year, Pillai added.

"We are looking at an increase of at least 25 to 30 per cent in turnover from the Mumbai store," Pillai said.

The company is expecting to break-even for the Mumbai store within the next 12 months, he added. The company is also looking at setting up four more stores in Mumbai in the coming months.