The Telegraph
Since 1st March, 1999
Email This Page
RPG to lower retail arm stake

New Delhi, Nov. 12: RPG Enterprises is set to dilute 20 per cent of its stake in Giant, its hyper-market arm, through private placement in about six months.

“The stake dilution is being planned to fund the expansion plans of the company in its retail arm. The company has appointed Ernst & Young for the process,” RPG Enterprises president and chief executive Raghu Pillai said on the sidelines of a retail summit organised by the Confederation of Indian Industry. RPG Enterprises currently owns 100 per cent stake in Giant.

The Calcutta-based business conglomerate’s retail arm is being expanded across the country with a view to double the sector-generated revenues by 2005. In 2002-03, the company's retail business generated revenues worth Rs 470 crore.

“We expect to generate Rs 600 crore in the current financial year and this will increase to Rs 1200 crore by 2005,” RPG Enterprises vice-chairman Sanjiv Goenka said.

As part of retail expansion plans, RPG Enterprises proposes to set up 14 hypermarkets with a total investment of Rs 200 crore in the next one and a half years in different parts of the country.

“After the successful opening of our first hypermarket, Giant, in Hyderabad in 2001, we are planning to set up 14 more by 2005,” said Goenka.

According to him, each hypermarket will be set up with an investment between Rs 15 crore and Rs 30 crore. It is a huge bulk store selling products ranging from hardware to garments to food at discounted prices.

Delhi will have two hypermarkets by 2004, one each in Gurgaon and Noida. Plans were also afoot to launch Gaint retail stores in Calcutta, Chandigarh, Bangalore, Chennai and Pune, said Goenka. “The cost of setting up a Giant in any part of the country will typically depend on the size of the store and the real estate cost,” he added.

Goenka said, “Hypermarkets like Giant, which target small retailers and institutional buyers, are quite developed abroad. RPG Enterprises has unveiled a new format in the Indian context.”

“There is a huge opportunity and this sector will see international competition in the next few years. We are going for a very focused expansion in the segment,” said Goenka.

Email This Page