Fitness chain Talwalkars Better Value Fitness today said it will utilise a major chunk of the the funds raised from its initial public offer for opening 27 new health clubs across the country.
The Mumbai-based firm, which announced plans to raise Rs 78 crore from its IPO yesterday, also said it aims to increase its total membership to at least one lakh by end of this fiscal and increase the employee headcount by 3,000 on the back of the expansion.
"A major chunk of the IPO proceeds will be used to fund our expansion by adding 27 new health clubs across the country this fiscal," Talwalkars Better Value Fitness (TBVF) Chief Executive Officer Prashant Talwalkar told PTI.
The fitness chain already has 11 clubs in the pipeline, the funding for which has already been tied up, he added.
The company's IPO will open for subscription on April 21, for which the price band has been fixed at Rs 123-128 per share. The offer consists of a fresh issue of 60.5 lakh shares of Rs 10 each, which represents around 25 per cent of the post-issue capital of the company.
The IPO proceeds would be primarily used to set up health clubs at an estimated cost of Rs 50 crore and for repaying loans of about Rs 20 crore.
TBVF currently has 58 health clubs across India with an average area of 5,000 sq ft. While 44 clubs are company-owned, six others operate under a joint venture with retail major Pantaloon and the rest are franchises.
Talwalkar said the company is also aiming to double its headcount and increase membership significantly following the opening of the new centres.
"We will double our headcount by 3,000 employees to manage the 38 new clubs. This will take our employee strength to 6,000," Talwalkar said.
Asked about the membership target, he said: "In the 44 company-owned clubs, we currently have a total membership of 55,000. We aim to increase it to one lakh once our other centres open."
TBVF is focusing on both the major metros and tier-II and III cities to tap the growing market for fitness. "While there are no rough estimates of the market size, it runs to hundreds of crores, of which the major share is of the unorganised segment. Brands like us have the potential to tap the segment."