Subhiksha shelves IPO, shuts 90 stores
By siliconindia   |   Friday, 05 December 2008, 00:59 IST   |    53 Comments
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Subhiksha shelves IPO, shuts 90 stores
Chennai: India's value retail chain Subhiksha has shelved its plan for an initial public offering (IPO). However the company will look for a listing with the help of its recently acquired MSE listed entity at a later point of time, preferably by March next year. "Subhiksha will be listed on both NSE and BSE by February-March 2009," said R Subramanian, Chairman and Managing Director of Subhiksha Trading Service, as reported in Financial Chronicle. Subramanian said, "At this point of time we are looking at a stronger stock market getting stronger rather than a stronger market becoming weaker. We will take a call and we are not in a rush to do the IPO," reports mint daily. This is a roll-back from earlier announcements by the Chennai-based firm 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 350 crore through the sale of 10 percent of fresh equity in the company. Though a company executive, requesting anonymity, had put the company's valuation at around 3,500 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. Meanwhile, the company has closed around 90 grocery stores across the country over the last one month or so. The company has also significantly reduced the inventory levels in its mobile retail arm - Subhiksha Mobile stores. "We were paying huge rentals for these stores, which was a huge drain on the company's finances. This, coupled with less than-expected footfalls, drove the operational costs to unsustainable levels," Financial Chronicle quoted a senior Subhiksha executive saying on anonymity request. However, according to R Subramanian, "We might relocate some stores to take advantage of low rent options." He said the company presently ran more than 1,600 stores and was not planning to shut any of its stores.

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