IndiaRetailBiz

Poor capital market conditions combined with comfortable funds position has prompted Subhiksha– the largest, small format, convenience stores, retail chain, to defer its much awaited entry into capital markets. It had plans to raise capital from public through maiden IPO, soon after crossing the milestone of 1,000 retail stores, which it had achieved by the end of 2007.

Founded 11 years ago in March 1997 at Thiruvanmiyur in Chennai by R. Subramanian, a banker turned retailer, this Chennai-based no-frills, discount retail chain, which sells food, grocery, fruits & vegetables, pharmaceuticals, and mobile products, is currently 24% owned by venture capital firm ICICI Ventures Limited.

Subhiksha, which while entering a new market believes in adopting cluster bombing strategy, is already over 1,300 stores strong with over 600 outlets also selling telecom products. Subhiksha is looking at investing Rs 300 crore with a view to scale up the number of its retail network to around 2,200 stores by the end of this year. No other Indian retailer would be any where near this number. Among the convenience retailers, while Reliance has so far set up around 700 Reliance ‘Fresh’ stores, Aditya Birla Retail’s ‘More.’ and RPG ’s Spencer’s have set up around 500 and 400 stores respectively. It must, however, be mentioned here that Subhiksha store, though, are much smaller in size than its counterparts like ‘Fresh,’ ‘Spencer’s,’ and ‘More.,’ among others.

The IPO earlier expected around July this year is now expected to hit the markets by the end of this year. Vallabh Bhansali-led Enam Securities, which very successfully managed Vishal Retail’s IPO in 2007 is also advising Subhiksha on its entry into the markets.