DCM Shriram to spin off rural retailer

DCM Shriram to spin off rural retailer
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First Published: Wed, Mar 28 2007. 12 37 AM IST
Updated: Wed, Mar 28 2007. 12 37 AM IST
DCM Shriram Consolidated Ltd, which makes fertilizers and sugar, plans to hive off its rural retailing business into a separate subsidiary in an effort to achieve faster growth and raise funds through an initial public offering.
DCM Shriram’s board is seeking the approval of shareholders for the separation of its Hariyali Kisaan Bazaar business. DCM said it has no plans to divest the business once it’s spun off.
“That business is completely different from our existing businesses,” said Vikram Shriram, vice-chairman of DCM Shriram, which has interests from chemical to sugar. “Therefore, the mind and the culture has to be different... also, we plan to bring focused management to the business.”
The company currently operates more than 60 rural outlets that sell everything from fertilizer and food to mobile phones and motorcycles.
DCM Shriram plans to invest up to Rs200 crore in the next 18 months to increase the number of Hariyali Kisaan Bazaar stores to 250.
The company says expansion will be funded through internal funds. In the next phase, the company plans to add 125-150 stores each year for the next several years, using proceeds from the public offering.
“Yes, it will get listed at some point in the future,” said Shriram, adding that the listing was at least 18 months away.
Rural India, where 70% of the population lives, accounts for 55%, or $165 billion, of India’s $300 billion annual retail sales. A host of Indian companies have already announced plans for rural retail chains.
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First Published: Wed, Mar 28 2007. 12 37 AM IST
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