Delhi-based Vishal Retail Limited is planning to set up 150 to 200 Vishal Mega Mart stores by 2010, with 32 of these earmarked for the financial year 2007-08. The company has also announced its entry into the capital market through an initial public offering (IPO), for raising Rs 110 crore to fund 22 of the upcoming stores. The IPO, with a price band of Rs 230-270, will close on June 13.
“Already realty deals for 19 stores have been finalised. Going by the present rate at which we are growing, we hope to open 150-220 Vishal Mega Mart stores by 2010,” said Ritesh Rathi, chief operating officer, Vishal Retail Limited. Of the 32 new stores, most will be in the southern states.
Rathi informed, “We are attaining a CAGR of 86 per cent. In FY 07 we made Rs 603 crore sales revenue compared to Rs 288 crore in the previous year. Given these rates, we believe we will be a Rs 5,000-crore company by 2010.”
At present, the company operates about 50 Vishal Mega Mart stores across 18 states, aggregating nearly 13 lakh square feet of retail area. On average, each store requires an investment of Rs 5-6 crore. “We target tier II and III cities as well as middle and lower middle class customers,” added Rathi.
Vishal Mega Mart stores feature around 17 different categories for in-house brands, some of which are manufactured by the company itself. Around 63 per cent of the revenues come from the apparel segments, while 22 per cent accrue from non-apparels and 15 per cent from FMCG. It may be noted that the company will be doubling production capacity to about 10,000 cloth pieces a day, by the end of this year, following the commissioning of its second manufacturing plant at Dehradun. The other plant is located in Gurgaon.