Shoppers Stop, the C L Raheja group-promoted lifestyle retailer, entered the final lap of its plans to buy another 32 per cent stake in group company Hypercity Retail. The note asking for shareholders’ approval went out today. Board approval came last month.
Shoppers Stop will pay Rs 125 crore for the extra stake, valuing Hypercity at Rs 391 crore. it already holds 19 per cent in Hypercity. After the purchase of this stake, Hypercity will formally become a 51 per cent subsidiary of Shoppers Stop.
At present, the promoters of Hypercity, mainly C L Raheja and his sons, own the other 81 per cent in Hypercity.
The Rahejas and their group companies also own 68.5 per cent of Shoppers Stop.
With the loans and advances Shoppers has lent to Hypercity, it would have put in about Rs 200 crore in the latter, after the stake purchase.
Hypercity has stores in Thane, Mumbai, Bangalore and Hyderabad and plans to take the count to 26 in the next four years. “Though Hypercity will continue to run as an independent business, its numbers will be reflected in the consolidated balance sheet,” said Govind Shrikhande, president and chief executive of Shoppers Stop Ltd.
So far, Kishore Biyani’s Future Group and Mukesh Ambani’s Reliance Retail are the only major retailers who run independent lifestyle and hyper stores, the large version of supermarkets.
“Hypercity is in the business of fast mover consumer goods (FMCG) and 60 per cent of the consumer wallet goes into this segment. With both formats (Hypercity and Shoppers), we can target 80 per cent of the retail business,” said Shrikhande.
Shoppers Stop stock ended the day at Rs 400.90, over 6.5 per cent higher than Tuesday’s close.
