Goenka: Money matters

Calcutta, April 26: The RPG Group is considering a private placement of shares and an initial public offering to finance its retail business expansion.

Vice-chairman Sanjiv Goenka said the decision on the private placement could be taken within a month.

The maiden offer may hit the market in six months, he added.

The group will invest Rs 400 crore in the next three years to expand its retail business, which includes four different formats of food and grocery retailing.

?We are considering both the IPO as well as the private placement options. But it is still too early to say how much will be raised through these two exercises,? Goenka told The Telegraph.

The group had restructured its retail business in October 2005 by bringing all its retail formats (except Music World) under a single brand Spencer?s.

There are four formats in RPG?s retail business ? Spencer?s Fresh, Spencer?s Daily, Spencer?s Super and Spencer?s Hyper.

The group is planning to generate resources from within the company as well as through equity dilution to finance its projects.

The total contracted retail area under Spencer?s is already over 1 million square feet and it is expected to double by 2007. The annual revenue is expected to touch Rs 4,000-5,000 crore in the next five years from Rs 500 crore now.

CESC net

CESC, the RPG group flagship, has reported a 13 per cent rise in profit after tax at Rs 44 crore during the January-March quarter. In the same period, sales grew 4 per cent to Rs 584 crore.

For the full year, profit grew 21 per cent to Rs 179 crore, while the topline grew 8 per cent to Rs 2,579 crore, despite a 5 per cent reduction in average tariff. Goenka said the new tariff from the regulatory body was expected soon.

The company has applied for coal blocks in Bengal to check the spiralling fuel cost.