Subhiksha to float IPO to fund expansion

Chennai-based retail chain Subhiksha is planning to raise Rs 500 crore through an initial public offering in the first quarter of FY2008-09 to fund its expansion plans.

The retail chain is planning to open 2,000 stores in two phases by the end of FY09. The required investment for the project is estimated to be Rs 1,000 crore. The company has 1,000 stores across the country.

Of the Rs 1,000 crore, the company will raise Rs 500 crore through an IPO, which would be in the first quarter of FY08-09. The remaining investment would be met by the company, a company source close to the development said while refusing to divulge more details.

According to the source, ICICI Prudential Assessment Management Company has evinced interest in investing in Subhiksha's pre-IPO.

In Maharashtra, the company has 72 retail store including 23 in Mumbai, 12 in Pune, 7 each in Nagpur and Nashik, 8 in Aurangabad and 4 in Kolhapur.

Subhiksha has set a sales turnover of Rs 3,500 crore for the current fiscal. The company expects to touch the Rs 8,000-crore mark by the end of FY 2008-09.

It registered a growth of 53.84 per cent at Rs 1,000 crore in sales turnover during FY 2006-07, as against Rs 650 crore during the financial year 2005-06.