Talwalkars plans pvt equity placement, IPO

Talks on with Sidbi and other financial institutions for equity placement

Fitness major Talwalkars is planning to tap capital market with initial public offer (IPO) by the end of the next year, to fund its expansion plans. Prior to that, the company plans private placement of equity as well.

"We are in talks with Small Industries Development Bank of India (Sidbi) and other financial institutions for equity placement. We will go in for IPO by 2006-end or early 2007," Rahul Talwalkar, director-finance, Talwalkars, said.

Talwalkars, a closely held firm promoted by V R Talwalkar in 1932, has 33 branches across India offering general fitness plan, personalised exercise programme, massage, gymnasium, steam bath and body-sculpting programme.

Rahul said the company is planning to raise Rs 100-150 crore including debt and equity components. The average cost of a single health club centre is Rs 2.5-Rs 3 crore.

"Talwalkars also plans to launch low-cost health clubs in metros and non-metros as only 2 per cent of the Indian population makes use of gymnasium and health clubs. This is to tap the middle-class population and the average cost to set up this centre is estimated at Rs 1 crore," he said.

Rahul added that the company would also foray into organic food business joints with in the health club at a later stage. Talwalkars director Amber Talwalkar said the company has drawn an ambitious expansion programme to take the total health club centres to 100 by 2010 from the current 33.

"We have identified Gujarat, Indore, Chandigarh and Bangalore as our next potential areas. We have identified two more sites for health clubs in Mumbai in addition to the current six projects," Amber said.

Amber added that Talwalkars is also considering launching corporate club management and consultancy for corporates as part of its business diversification.