Shoppers Stop Ltd, the retail arm of K Raheja Corp Group, plans to raise funds to up its stake in its retail arm. The company is looking at qualified institutional buyers to raise funds.
The board of the company has approved the issue of 40 lakh equity shares to qualified institutional buyers, said the company in a statement. The amount is roughly estimated at over Rs 145 crore as per shares traded in the stock exchange on Friday.
Reports suggest that the company will utilise the fund in acquiring around 32% stake in group firm and hypermarket chain Hypercity, from its current 19% stake. Shoppers Stop, under an agreement, can raise its stake to 51% in Hypercity by June 2010.
The board further agreed to seek approval from the shareholders of the company to issue up to 40 lakh warrants to promoter and promoters’ group company, each convertible into one equity share of the company, added the statement.
The company operates department stores under the brand name Shoppers Stop. Some of the other retail chains operated by the company include Mother Care, Crossword, Home Stop, MAC, Clinique & EStee Lauder, Arcelia and Nuance.
Net sales of the company was Rs 382.05 crore in September quarter against Rs 350.08 crore a year ago. The net profit was Rs 8.75 crore against a loss of Rs 22.6 crore.
Besides Shoppers Stop, other retailers who are in the fund raising spree include Pantaloon Retail, Spencer's Retail, Koutons Retail and Alok Retail. Recently, Jay Gupta, managing director, The Loot, told VCCircle that the company was planning to raise Rs 100 crore through IPO in the next one year.