Brand building

Mumbai, April 21: Shoppers? Stop will hit the road on April 27 with an initial public offer (IPO) of shares that will be bid for in a price range of Rs 210 to Rs 250 each.

Money raised from the issue will fund an expansion that will see the K Raheja group company set up 11 stores in high-spending cities of the country. This will include two ?hyper markets? each in Bangalore and Pune.

In all, 6.9 crore shares will be up for grabs under the book-built issue, which will close on May 3. The price band of Rs 210-250 is comparable to the offers made by rivals like Pantaloon Retail and Trent. The list of retail stores whose shares are traded on stock exchanges is small.

The issue is equivalent to 20.21 per cent of the fully diluted post-issue paid-up capital of Shoppers? Stop. Sixty per cent of the issue has been reserved for qualified institutional buyers, while 15 per cent is for non-institutional investors. The remaining 25 per cent will be allotted on a proportionate basis to retail investors.

The company, having reported losses in 2000 and 2001, turned in a profit in 2004-05, on a turnover of Rs 511 crore.

The company sees a big room for growth in the Rs 8,57,000-crore retail industry, given that organised firms have a minuscule share of 2 per cent. ?We foresee this share of organised retail increasing to 10-12 per cent by 2010,? managing director and CEO B. S. Nagesh said.

Over 600 stores coming up across the country will require the Rahejas to drum up Rs 25,000 crore in investments. ?At present, we have a presence in 16 cities. These add up to an area of 7,52,848 sq ft,? Nagesh added.