Biyani sees 5-fold rise in Aadhaar revenues

Kishore Biyani's Future Group is expecting a revenue of Rs 400 crore by 2010 from its rural retail venture "� Aadhaar"� nearly five times more than what it earned in FY08.

The group is also planning to set up 15 Aadhaar stores this year and 50 stores next year, taking the total number to 130 from 65 now. The group plans to invest nearly Rs 30 crore for expansion. Aadhaar's new stores and fresh categories are expected to bring higher revenues for the group, which is expecting Rs 30,000 crore from its retail ventures such as Big Bazaar, Pantaloon among others by 2011.

"We have increased productivity of the venture and added new categories such as consumer durables, fashion, mobile phones, food and grocery and so on,'' said Kishore Biyani, chief executive officer, Future Group.

Future Group had bought 70 per cent stake in Aadhaar from Godrej Agrovet early this year for nearly Rs 30 crore. Aadhaar outlets provide farm solutions and agri services to farmers beside selling general merchandise. Aadhaar earned Rs 70 crore in FY08, double from what it made in the previous financial year. In FY09, the group is expecting a business of Rs 200 crore.

The group is targeting rising income and growth in rural areas. According to a YES Bank report, the country's rural retail market is expected to grow by 29 per cent to Rs 180,000 crore by 2010. The rural per capita income is expected to double to Rs 14,000 by 2012 from Rs 7,000 in 2007, as more families switch to commercial farming from subsistence farming, the report said.

E-choupal and Choupal Sagar of ITC, Triveni Khushali Bazar, a retail chain of Triveni Engineering and Industries, DCM Shriram's Hariyali Kisaan Bazaar, Indian Oil Corporation's Kisan Seva Kendras among others are the main players in the rural retailing sector. Mukesh Ambani's Reliance Retail has also announced its plans to set up town centres with low-cost malls, and rural hubs in towns with a population of less than 50,000.

Analysts tracking the sector said since most of the rural retail ventures were confined to certain states, so they could not achieve economies of scale, but Aadhaar could complement well for Future Group's expansion plans.

"Future Group already has back end operations in place and strong supply chain efficiencies. Thus it has been able to keep its cost of operations low,'' said Pinakiranjan Mishra of Ernst & Young.

The group is looking at launching its insurance, micro finance and consumer credit products through the Aadhaar outlets in phases, Biyani said. It has a insurance joint venture with Italian company Generali and the group's financial services arm, Future Capital Holdings, has consumer credit outlets called Future Money.

"We want to double the business every year as huge opportunities exist in the sector. We will cater to all classes of customers in the smaller towns and villages. We are selling localised products and aspirational goods to our buyers,'' said Arvind Chaudhary, chief executive officer, Aadhaar.

Chaudhary said that the company has aligned the operations of Aadhaar such as procurement, supply chain, technical services with that of Future group ventures such as Big Bazaar and Food Bazaar.

Aadhaar is focussing on selling products at reasonable rates. The firm has presence in 2,200 villages and works with 6,000 farmers. Currently, it is expanding its footprints in Punjab, Haryana, Gujarat, Maharashtra among others. In the next phase, the company would enter Madhya Pradesh, Andhra Pradesh, Karnataka among others.