Mumbai: Food and grocery retail chain Subhiksha will invest around Rs 1,200 crore for expansion by 2010, a top company official said.
“We will have around 3,000 stores by 2010 and we plan to invest around Rs1,200 crore in the period,” Subhiksha’s promoter R Subramanian told PTI.
The funds would be raised through a mix of equity and debt,“ Subramanian said.
At present, the chain has around 1,480 stores.
“We will be present in around 250 cities by 2010,” he said, adding that each store will be of an area of 15,000 sq ft to 20,000 sq ft.
In a move to further accelerate its growth plans, Subhiksha is also acquiring a majority stake in a Chennai- based listed company Blue Green Constructions and Investments Limited, he said.
The respective Boards of Subhiksha and Blue Green are also meeting on Monday to consider a merger of the two companies. The merged entity will be called Subhiksha Limited and is expected to list its shares on the NSE/BSE apart from the MSE where its shares are currently listed.
“This transaction will ensure that Subhiksha has access to capital and will continue to be on the fast-track of growth. It will also enhance value for our stakeholders and help our objective of becoming $5 billion company by 2011,” Subramanian added.
“We are planning an entry into consumer durables to further enhance Subhiksha’s value proposition to the Indian consumer. The company plans to have a two million sq ft of retail space in this segment in the next year,“ he added.
On inflation, he said, “We believe that we will get more customers if inflation continues, since our pricing strategy is to offer our products at a discounted price,” he said.
Subhiksha, apart from being a low cost supermarket, is also a pharmacy and telecom retail chain.
The retail chain is eying a turnover of around Rs 4,500 crore in FY’09.
The company had clocked a turnover of Rs 2,300 crore in 2007-08, he said.