Lalbhai taps PE to propel Mega Mart

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Lalbhai taps PE to propel Mega Mart

Post  Anand on Wed Aug 20, 2008 3:20 pm

Sanjay lalbhai
Weaving funding plans: Sanjay lalbhai
BANGALORE/MUMBAI: Textile baron Sanjay Lalbhai has opened discussions with a clutch of private equity players to fuel the expansion of Arvind's discount fashion chain Mega Mart. It is believed that Arvind has mandated Enam to raise around Rs 100 crore in Mega Mart, which is spun off as separate company within the Arvind fold, sources said.

Sources said Mega Mart would have received interests from Indian private equity players, such a ICICI Ventures and IL&FS, for a possible private placement. The restrictions on FDI in multi-band retail will limit Mega Mart's suitors to pure-play India funds.

Mega Mart could be seeking a valuation of around Rs 700-800 crore. Mega Mart closed with approximately Rs 140 crore tunover in FY08.

In recent months, Mr Lalbhai has articulated his desire for a strong retail play with Mega Mart being the best bet for doing it. The decade-old Mega Mart, which started off as factory outlets for Arvind's owned and licensed brands, but has evolved into an early move in the discount fashion retail play.

Future Group's Brandy Factory is the key rival to Mega Mart in the discount space. When contacted, Arvind's CFO, Jayesh Shah, said: "We have been receiving proposals from several funds. Though we have huge expansion on the anvil, we have no immediate plans to raise funds, as we are meeting capital expenditure requirements from internal accruals."

Last year, Arvind unveiled Rs 400 crore investment to expand Mega Mart into 250 store network over the next 3-4 years with Rs 1000 crore turnover as target. Mega Mart has around 100 outlets currently, and showed up with the first big format store in Chennai with over one lakh sqft space. Mega Mart has also opened doors to outside brands even though it remain a key driver for Arvind's owned brands like Ruggers, Flying Machine, Ruf 'n Tuf and Excalibur.

Arvind, which operates the second largest branded fashion apparel business in the country, is also expected to come out with new retail concepts like luxury lifestyle format in the coming months. Arvind's existing portfolio of international brands include Tommy Hilfiger, Arrow, US Polo, Lee, Wrangler and Nautica. The company is also in the midst of introducing IZOD and Pierre Cardin brands.


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Re: Lalbhai taps PE to propel Mega Mart

Post  ameyo1985 on Thu Aug 21, 2008 9:22 pm

nice one.... i dont kno this ....thanks for ur post


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