BK Modi's Spice Group has acquired a 100% stake in the Indian arm of Dubai-based mobile retail chain Cellucom in an all stock deal. Cellucom will get a 26% stake in Spice Group's mobile retail venture HotSpot and no cash changes hands. Modi plans to invest Rs 100 crore in the retail venture in 2009, reports Economic Times.

Cellucom was operating as joint venture with RP Goenka Group (RPG) till last year. But RPG sold its 50% stake to Cellucom late last year, for an estimated Rs 150-200 crore. After the deal, Cellucom had given a mandate to Ernst & Young to find an Indian investor for its expansion plans.

The size of India's handset market is expected to be about Rs 30,000 crore, but most of the market is unorganised. Also the margins are relatively less in this space, which was the reason for RPG's exit.

There has been private equity funding in this space also. Peepul Capital invested Rs 100 crore in Chennai-based retail chain UniverCell, which currently has a presence in South India, in 2007. MobileNXT is another funded player in this segment, and has raised funding from TV18, Avendus and some angel investors.

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