Shopper's Stop IPO likely by March

The C L Raheja group-controlled retail outfit, Shopper's Stop Ltd, will tap the market with a book-build initial public offering (IPO) by the end of March. The issue was initially slotted for 2004.

The company got the approval of the Securities and Exchange Board of India on Friday for the IPO of 69.46 lakh shares after nearly 6-7 months from the date of filing.

It is now coming at a time when the industry circle is expecting some good news in the Union budget for the sector.

The chief financial officer of Shopper's Stop, C B Navalkar, said that a family dispute between C L Raheja group and G L Raheja group was the main reason behind the delay.

"It was delayed owing to objection from G L Raheja group. There was some common property and company of these two groups which was not yet divided. So there was some problem," he said.

Navalkar, however, said that C L Raheja group has already the initiated settlement process. "The process is on," he said.

Shopper's Stop IPO is going to be the third from the retail industry after Pantaloon and Trent.

The company has made a net profit of Rs 10 crore in a turnover of Rs 320 crore till November 2004.

It has posted a net of Rs 12 crore in 2003-04 over a turnover of Rs 404 crore.

The CFO said the company is likely to perform better this time as December, January and February considered as a good season for the retail industry.

"We are updating the results for the prospectus because of the delay. Generally, this is festive season and is good for retailers as the people buy apparels, FMCG, personal care products during this time," he said.

Navalkar said Shopper's Stop is likely to raise at least Rs 130-140 crore from the proposed issue iof 69.46 lakh equity shares.

"It is expecting to raise much more than Rs 130-140. But that is the bare minimum because it is adopting a price discovery route. So if the bid price is good then the fund mobilisation will be higher," he said.

According to him, the share of public would be around Rs 100 crore.

The C L Raheja group as promoters would infuse Rs 25 crore through the IPO, which is around 3.46 per cent of the post issue equity capital of Shopper's Stop.

The public issue will constitute 20.2 per cent of the post issue equity capital of the retail outfit. The C L Raheja group holding in Shopper's Stop will come down by around 13 per cent after the issue, from 79.75 per cent now to 67.09 per cent post-issue.