Indian Stock Market

Future Value Retail

Big Bazaar and Fod Bazaar will transferred to a Subsidiary called ” Future Value Retail “.

This unit will be functioning independently. The company may launch an IPO in future . May be possible.

The company may look to unlock value through this subsidiary in future.

The entire work will be over in 3 months.

Closely-held retail chain major Subhiksha has quietly crafted a strategy to become a listed entity even as a volatile stock market is upsetting the plans of many companies wanting to go public.

Subhiksha, India’s largest food and grocery discount retailer, announced it is acquiring a majority stake in a Chennai-based listed company, Blue Green Constructions and Investments. The company on Saturday said that the boards of the two companies will meet on Monday to consider a merger. The merged entity will be called Subhiksha Limited and is expected to list its shares on NSE/BSE apart from MSE where Blue Green’s shares are currently listed.

Blue Green is a non- banking finance company promoted in the early nineties when the sector was booming. It is almost a shell company with its shares listed in MSE not actively traded. Subhiksha promoter R Subramanian told ET: “The acquisition will not cost us much and comes to Rs 2.5 crore without any liability. Blue Green has a paid up capital of Rs 5 crore and we will pay 50% to get majority stake. Its promoters, hailing from south Tamil Nadu, had plans to launch consumer durable stores. They had identified properties. But, it did not materialise as they could not raise funds”.

By this deal, Subhiksha will be able to expand its operations including in the durable format. Post listing of shares, its valuation in terms of market cap is expected to be Rs 4,000 crore. It is said the listing will also help the private investors, who have substantially invested in Subhiksha, to have an exit route. They are said to have already seen substantial increase in their return over the years with the retail chain expanding fast. ICICI Venture Capital has a 24% stake in the retail chain.

In a statement, Mr Subramanian said: “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 us achieve our objective of becoming a $-5 billion company.”

GIC to buy out 25.4% stake in Reid & Taylor for Rs 900 cr

 Apparel maker S Kumar’s Nationwide (SKNL) on Tuesday announced that an affiliate of GIC Special Investments will acquire 25.4% stake in its wholly-owned unlisted subsidiary Reid & Taylor for Rs 900 crore. The deal, that will be executed through a mix of fresh shares and convertible warrants, puts the valuation of Reid & Taylor at Rs 3,540 crore, higher than SKNL’s Rs 2,240 crore.

GIC Special Investment is the PE investment arm of the Government of Singapore Investment Corporation. After the conversion of warrants, SKNL will hold 74.5% stake in Reid & Taylor, which is in the business of high-profit margin luxury textiles and ready-to-wear garments. The Kasliwals-controlled SKNL acquired Dumfriesshire-based Reid & Taylor in 1997. Recently, it was spun off into a separate unit. Reid & Taylor may be listed with the stock exchanges later. Its brands are endorsed by Amitabh Bachchan and Pierce Brosnan.The SKNL stock rose marginally up to close at Rs 106.55 in a falling Mumbai market.

The deal is struck when SKNL is looking at potential acquisition opportunities in Europe and North America in the garment, home textile and high-value cotton segments. SKNL last week said it will invest up to Rs 2,000 crore in its holding company SKNL International, which will act as an acquisition vehicle. The unit will be established in the Netherlands as it is a tax-efficient jurisdiction. Reid & Taylor targets to open 341 stores by 2009-2010, sources said. Each store would have an average area of 1,700 sq ft. Nearly 80% of these stores will be its high-street exclusive outlets and the remaining will be in shopping malls, preferably in Mumbai and Delhi.

The Reliance Retail Limited (RRL) announed the launch of its third Jewellery specialty store “Reliance Jewels” and the first in North India, in Ludhiana today.

Spread across two floors, the over 5000 sq feet store offers over 20,000 designs of exquisitely crafted jewellery from across the country to make it a one-stop shopping destination for fine jewellery. Reliance Jewels offers consumers a wide and unique range in gold and diamond jewellery.

Commenting on the launch of the first Reliance Jewels store in the North, Bijou Kurien, President and Chief Executive Lifestyle said, “it has always been the endeavour of Reliance to provide the consumers with a wide range of high quality products at competitive prices. Reliance Jewels is another milestone in our effort f bringing a unique shopping experience with assured purity of gold and certification of diamonds. In our store we plan to give our consumers an unparalleled range of jewellery and an unmatched shopping experience”.

The gold jewellery range excompasses Kolkatta Filigree, Rajkot Antique, Kundan from Rajasthan, Jadau from Amritsar and much more.

In Diamond jewellery, Reliance Jewels offers the finest q uality of diamonds and the widest range of designs, ranging from daily wear to party wear, from diamonds for weddings as well as to celebrate every special occasion in a woman’s life.

One floor of the store is reserved exclusively for bridal collection sets and diamond jewellery with a private viewing room for added comfort.

Reliance Retail, promoted by Reliance Industries, has opened 700 stores in 14 different formats in 60 cities of the country in the last  two years of its operation.

Its food and grocery chain Reliance Fresh has 600 stores across the country.

“We estimate that our retail business will generate in excess of half a million jobs directly over the next five years, and many times that number indirectly,” said Mukesh Ambani, chairman of RIL, at the annual general meeting (AGM) today.

Based on experience over the last twelve months, Reliance has organised its retail initiative to focus on product-market formats, Ambani said. “It has brought about cleaner and sharper business focus, positioned each format clearly in the minds of consumers and enabled partnerships with global leaders in each domain,” he said.

Reliance Industries Ltd plans to expand its polyester business, including by acquisitions, and the refinery of a subsidiary would open ahead of schedule this year, chairman Mukesh Ambani said on Thursday.

Ambani, ranked by Forbes Magazine as the world’s fifth-richest man, also told a shareholders’ meeting that Reliance would seek opportunities in alternative energy as a natural extension to its conventional energy portfolio.

Shares in India’s most valuable listed firm fell as Ambani was muted on the start date for gas supply from its Krishna-Godavari basin fields off India’s east coast.

Ambani only reaffirmed the $77 billion company was on track for oil and gas production from the fields later this financial year.

At 12.09 pm on Thursday the shares were down 2.7 per cent lower at Rs 2,198.

Ambani said Reliance’s polyester capacity rose by a quarter to 2.5 million tonnes a year after it bought the assets of Malaysian polyester maker Hualon Corp last year.

The company would focus on speciality polyester, looking for opportunities in automotive, medical and construction fields.

“Reliance envisages consolidating further its global leadership in polyester by pursuing greenfield investment and acquisitions in the entire value chain,” Ambani said.

He said a 580,000 barrel per day (bpd) refinery by unit Reliance Petroleum Ltd, 5 per cent owned by Chevron, at Reliance’s Jamnagar complex in Gujarat, would be commissioned ahead of schedule.

A source had told Reuters in April Reliance would begin testing its new refinery in July and commission it in September.

Pantaloon Retail, the flagship enterprise of Future Group, has signed a 50-50 joint venture agreement with French apparel firm Celio to add to its garment retailing in India.

The company is also planning to add another 3-4 million sq ft of retail space in the current fiscal through its different formats.

“We have formed a joint venture with French apparel firm ‘Celio’,” Pantaloon Retail India Director Rakesh Biyani said at the inauguration of ‘Replay’ brand stores here today.

He said the JV is a part of the company’s plans to add another 3-4 million sqft of retail space in the current fiscal.

The tie up with Celio is being done to provide complete range of fashion accessories in clothing segment to the clients and it would be placed between the mass market and the luxury segment.

“Our proposed joint venture with Celio would sell products in the price range of Rs 1,500 to Rs Rs 3,000 which would work as bridge between the mass market and high-end luxury segments,” Biyani said.

The company would formally announced its agreement with Celio in July, this year and is planning to open first store towards the end of October, Biyani said.

Presently, the company has tie-ups with 12 overseas firms in apparel segment in different formats and is also talking to other foreign firms for similar alliances.

Pantaloon has entered into an exclusive tie-up with an Italy-based firm, Fashion Box Group to open ‘Replay’ brand stores in India through master franchise agreement to retail fashion accessories

Mudra Lifestyle Ltd said on Tuesday it had received an export order worth Rs 15 crore and a domestic order worth Rs 20 crore.
The orders will be executed within four months, it said in a statement.

Reliance Retail IPO : Reliance Retail IPO ?

Reliance Retail IPO :  Reliance Retail , a Subsidiary of Reliance Industries Ltd , is rumoured to be going for an IPO.

If the news is true , then RIL Shareholders can rejoice.RIL shares has been hovering between 2700-2900.RS .

Reliance has recently entered the retail market and is aggressively working on introducing a pan-India network of retail outlets in multiple formats.

Indiabulls Real Estate has acquired Piramal groupstake in Piramyd Retail

Indiabulls Real Estate (IBREL) has acquired the Ashok Piramal group’s 63.9% stake in Piramyd Retail for Rs 208 crore, kick-starting the first phase of consolidation in the nascent Indian retail space.

The acquisition has been routed through IBREL’s 100% subsidiary, Indiabulls Wholesale Services. Indiabulls will also make an open offer for upto additional 20% of the fully diluted paid up capital at Rs 74.73 per share, a 28% discount to last Friday’s closing price of Rs 105.

“The acquisition clearly highlights Indiabulls plan to be the leader in the retail industry in India by making sure that we are present in all the major retail verticals. As announced earlier Indiabulls is already in the process of opening 30 big box wholesale club stores all across the country. With this acquisition Indiabulls will have a very strong presence across wholesale/cash and carry, lifestyle and convenience store formats. We aim to provide the Indian shopper the best possible value for their money and a par excellence shopping experience coupled with stellar customer service,” says Mr Ikroop Singh, CEO, Indiabulls Wholesale.

Earlier this year, IBREL had announced plans of foraying into the retail business and had indicated a roll out in 30 wholesales stores in tier 2 cities in the first phase with a total investment of Rs 1,500 crore.

Nandan Piramal, vice-chairman and managing director of Piramyd Retail was not available for comments. Sources said the deal was struck overnight.

Mr Piramal had claimed in recent times his intention of staying put in the business. Piramyd Retail is a lifestyle retail and convenience store chain with over 42 stores spread over more than 10 lakh square feet, operating under the Piramyd Megastore and Trumart brands.

It has around 1,300 employees and a typical format of Piramyd Megastore is 50,000 to 60,000 square feet lifestyle stores while Trumart stores are convenience stores of 5,000-6,000 sq ft. Piramyd has a pan India footprint with dominant presence in Maharashtra, Gujarat, Rajasthan, Delhi, Punjab and Madhya Pradesh.

Pyramid Retail shares were up by 50% during the past one week to close at Rs 108.5 on 7th December, During the last one month, the stock was up by 103.5%. The Ashok Piramal group had sold Crossroads, the first retail mall in the country to Pantaloon in 2005. Pantaloon had reportedly paid Rs 250-260 crore the country’s first shopping mall that opened in 1999.

Currently, promoters are holding around 64% stake in the Pyramid Retail while public hold around 35% and the remaining is with the institutions. Indiabulls Real Estate is also developing marquee properties in Lower Parel in Mumbai and has very recently announced the launch of Indiabulls Centre One, its first building offering 1.4 million square feet for lease.

It is also developing over 50000 residential apartments pan India and has over 4000 acres of land bank which it intends to use for commercial and residential development purpose.

Piramyd Retail was in the news recently following speculation about entertaining sell-off discussions with the Aditya Birla Group. Listed on the bourses in 2005, Piramyd was one of the first modern retailers to open shop (1999) in the country.

A few years ago, it was seen as a strong competitor to players such as Shopper’s Stop and Kishore Biyani-led Future Group. However, an unclear growth vision saw the company slipping even as the competition picked up steam in recent years and it failed to cash in effectively on the first-mover advantage.

Soure : Economic Times

Subhiksha IPO : Subhiksha defers IPO indefinitely

India’s largest chain of supermarkets Subhiksha Trading Services Ltd is indefinitely delaying a planned initial public offering (IPO) because it has enough money to fund its expansion and will look for a listing at a “later point of time” as the stock market builds on its highs.
It prefers bank borrowings to plug any funding needs that may crop up.
“At this point of time we (are) looking at a stronger (stock) market getting stronger rather than a stronger market becoming weaker,” said R. Subramanian, managing director of Subhiksha. “We will take a call (and) we are not in a rush to do the IPO.”
This is a roll-back from earlier announcements by the Chennai-based Subhiksha that it would initiate the listing process as soon as the retailer touched the 1,000-store mark. The retailer had previously said it hoped to file a draft red herring prospectus as early as January 2008 to raise around Rs350 crore through the sale of 10% of fresh equity in the company.
A company executive asking not to be named had put the company’s valuation at around Rs3,500 crore in October. Subramanian declined to put a valuation for the company and said it is “changing every day”, thanks to a robust stock market.
Subhiksha had even appointed Enam Securities Pvt. Ltd, ICICI Ltd and Kotak Mahindra Bank as lead managers to start IPO procedures, the executive had said in late October.
Subhiksha crossed the 1,000 store mark last month. Attaining the target of 1,000-store mark was a “necessary condition (before going for the listing), but not a certain condition,” Subramanian said.
“We will do an IPO at some point of time, but we don’t need to rush into it saying ‘hey the budget is coming which is going to be bad or elections are coming which is going to be bad so we should do before that,’” he said.
“There are no event triggers…we will figure the right time.”
Rather, the company said it will raise debt from banks should the need arise. “Whatever stores we do by March will be financed and today financing is not a problem,” Subramanian added.
Two other mid-sized retailers, including another discount retailer Vishal Retail Ltd and apparel company Koutons Retail India Ltd, have raised money through share sales to the public in the past year.
Investors voted with their wallets for Vishal’s July IPO, and the Rs110 crore issue was oversubscribed almost 70 times even though the public issue opened at the same time as one of the country’s largest offerings by real estate major DLF Ltd that raised about Rs9,000 crore.
Koutons also received heavy response from investors, pushing the company’s share price 42% on its debut. Koutons’ shares were oversubscribed 45 times and have risen 80% since its October debut. Vishal’s shares have climbed 180% since its July listing

Mukesh Ambani-owned Reliance Retail Limited (RRL) has announced its foray into gems and jewellery trade with the aim of opening 300 ‘Reliance Jewels’ outlets across the country during the next three years.

The company launched its first such Reliance Jewels speciality store in Jayanagar, Bangalore. The store is spread over three floors, the 6,000 sq. ft. store offers over 10,000 designs of exquisitely crafted jewellery from across the country to make it a one-stop shopping destination for fine jewellery, offering consumers a wide range in gold and diamond jewellery

Under attack from small shopkeepers and farmers in several states for its retail initiative, Reliance Industries chairman Mukesh Ambani today took pains to explain how Reliance Retail has always been a friend of these two important constituencies.

“We are sensitive to the interests of small shopkeepers. Our retail initiative will,  in no way, jeopardise their interests and that of small vendors who service consumers,” Ambani said.

On the contrary, Reliance Retail will enable them improve their income and serve consumers better as it would generate significant employment opportunities — both full-time and flexible time – particularly in rural India for those who are weak on employability, Ambani said.

“There have been concerns in some quarters on the roll-out of the organised retail initiative, which seeks to change a system that has been in place for centuries. Transformational initiatives always come with challenges. We stand committed to what we have set out to achieve. It is my conviction that the organised retail initiative will gain momentum once the benefits are fully understood,” he said.

Citing an example, he said Reliance was bringing to farmers, to begin with in Gujarat, Maharashtra and Andhra Pradesh, high quality, tissue-cultured banana plants that yield 35-40 kilograms per bunch of fruits as against 20 kg with conventional cultivation.

Reliance directly buys these bananas from farmers at prices that are 10 to 15% higher than what they get through conventional channels apart from the correct weights. Reliance also uses ripening processes that result in safe-to-eat bananas, he added.

Reliance will also shift its focus from industrial and services sectors to cover agriculture and rural sectors to become the first Indian company to focus on the agriculture and rural sectors as fulcrums for growth. “Our recent emphasis on bridging the farmer with global consumers, through the organised retailing initiative, is a precursor to an agro-driven strategy. Reliance will work with farmers in creating economic opportunities,” Ambani said.