News: Retail tale retold - Forecasters line up optimism, players mega plans

(DNA 09/09/2006) Mumbai - The size of the organised retail sector in India is expected to touch $60-75 billion by 2011 from about $8 billion currently, says Arvind Singhal, chairman, Technopak, a retail consultancy firm.

During the same period, the overall retail pie would increase to $430 billion from about $300 billion currently, indicating that organised retail would corner 12-17% of consumer’s purse, up from under 3% currently.

A mind-numbing $22 billion worth of investment would be poured into organised retail over the next five years, against $2 billion that has been invested over the past five years.

Technopak is consultancy firm which tracks textile and retail space.

Singhal spoke to reporters on the sidelines of India Retail Forum, a retail conclave.
The company would formally present the report on Saturday.

But $22 billion investment would result in a topline of merely $60-75 billion?

“This is because initially a bulk of investment would go to the back-end and supply chain, which would improve efficiency and not add much to the sales. Impact on sales would be felt only later,” said Singhal.

Singh says there would about 40 odd organised retailers in the country, with the top seven alone accounting for $14 billion, or two-third of the investments.

Deepak Fertilisers in expansion drive

Deepak Fertilisers, which is setting up a home-improvement mall in Pune under the Ishanya brand, is in talks with an overseas player to set up a dedicated building covering a 1,20,000 sq ft, I S Narula, president & chief executive officer, Ishyana said on Friday.

The company is also toying with the idea of setting up a hotel in the adjacent plot.

“We haven’t finalised it (the hotel plan) yet. Due to the location, several players have come to us with proposals, but nothing has been finalised yet. What is immediately on the cards is the construction of a dedicated building for an overseas customer and the deal is likely to be signed soon,” Narula said.

Ishanya’s current gross leaseable area is 5,50,000 sq ft and the new building would take it up to 6,70,000 sq ft.

Ishanya is spread over 10 acres of land and the company has another 6.5 acres of land next to it, which can be commercially exploited.

Being close to the airport, a hotel project makes immense sense, and according to sources, the company has almost made up its mind in setting up a hotel once the Rs 110-crore mall project is complete.

The project has been funded through debt and internal accruals.

Inorbit to set up nine malls

Inorbit Malls, a member of the Mumbai-based developer K Raheja Corp, is planning to set up nine malls over the next three years at an investment of Rs 150 crore per mall, chief executive officer Yogesh Samat said on Friday.

The company currently operates one mall, spread across 0.55 million sq ft in Malad, Mumbai.

The new ones are coming up in cities like Navi Mumbai, Hyderabad, Pune, and Delhi. Samat said the new malls being set have 0.5 to 0.85 million square feet of gross leasable area.

Hathway’s cable TV services in Punjab

Hathway Cable & Datacom Pvt Ltd, a part of the Rajan Raheja Group, one of the largest and fastest growing cable networks in India and one of the largest MSOs (Multi System Operator) operating across the country, has currently launched its digital cable TV services in Jalandhar in Punjab.

Pantaloon Retail to invest Rs 4,000 crore

Pantaloon Retail, part of the Futures Group, plans to invest Rs 4,000 crore in expanding its retail coverage to 30 million sq ft by December 2010, MD Kishore Biyani said on Friday.

Topline by then is expected to rise to Rs 30,000 crore from Rs 2,000.

The company now has 4 million sq ft of retail space, which is seen rising to 16 million sq ft by December 2007. The company has got a board approval to raise over Rs 950 crore to fund expansion, though issue of rights issue, follow on issue and part sale of stake in subsidiaries.

Pantaloon Retail-promoted retail funds Kshitij and Horizon are developing 16 million square feet of retail space. Collectively the fund has raised $430 million, of which $85 million is the rupee fund.