Thursday, January 7, 2010

Future Group: Value Retail Unit May Consider IPO

India's Future Group may look at options including an initial public offering if its discount store business needs to raise funds, the chief executive of its retail operations said Wednesday.

"An IPO is a possibility," Rakesh Biyani told Dow Jones Newswires. "But there are no such plans now."

Future Group operates Pantaloon Retail (India) Ltd., the country's largest listed retailer by market capitalization and revenue.

Pantaloon Retail separated its discount store business, which includes the Big Bazaar hypermarket and the Food Bazaar supermarket businesses, into Future Value Retail Ltd. with effect Jan. 1. The company had in October said the move will enable capital infusion into the business.

Pantaloon Retail has raised about 7.50 billion rupees ($163 million) so far in the current financial year, Mr. Biyani said. He didn't provide details on the fundraising.

It had raised 5.00 billion rupees via a share sale to institutional investors, while a banker had told Dow Jones Newswires in July that Pantaloon Retail was looking to sell 2.50 billion rupees of bonds.

Mr. Biyani said while sales for the October-December quarter were on the "positive side," they took a hit as stores had to be shut for almost nine days in the southern Indian state of Andhra Pradesh due to political unrest.

The company has a significant presence in Andhra Pradesh, which has witnessed protests and demonstrations over plans to divide the state into two.

"There has been a significant impact there," Mr. Biyani said, without elaborating on loss in sales.

Pantaloon Retail had posted an 18% rise in net sales from a year earlier to 17.77 billion rupees in the three months ended Sept. 30.

The company projects its net sales for the current financial year ending June 30 to rise more than 30% from the year-earlier period's 76.69 billion rupees because of a strong rebound in India's retail sales.

"Sentiment (overall) is extremely positive," Mr. Biyani said.

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