Real estate-to-financial services major Indiabulls plans to enter the booming retail business. The company, which is one of the leading financial service providers, will invest Rs 1,500-2,000 crore to set up stores for wholesale retailing. The stores, which will come up in tier 2 and tier 3 cities, will occupy a retail space of 1-1.5 lakh sq ft each.
“We are planning to set up one shop in every city. It will be a complete business-to-customer stores catering to bulk purchases. We will be investing over Rs 50 crore on each store,” said Gagan Banga, CEO of Indiabulls Credit Services.
Indiabulls plans to set up shops in 30 cities across the country. These stores will be discount stores. The company is planning to convert it into a wholesale store for small traders at a later stage. “There will be 16 stores in the first phase and the first store will be ready by March 2008,” Banga said.
All the 16 stores will be ready within six months to one-year. The company has finalised land acquisitions for the first phase of its retail project. The shops will come in cities including Ahmedabad, Jodhpur, Agra, Indore, and Kanpur.
“Indiabulls will own real estate at these places. We will have stores and the remaining place will be leased out,” he said.
At present, the retail company, Indiabulls Wholesale Services Ltd will be a 100 per cent subsidiary of Indiabulls real estate. “At a later stage, we may look at diluting the promoters equity or list the company,” Banga said.
To fund the retail project, Indiabulls will raise Rs 2,300 through an issue of up to 43 million fully convertible warrants. The warrants, to be issued to founders and directors, will be convertible into equity shares at Rs 540 each.
Indiabulls real estate is the third largest real estate firm in the country with over Rs 14,000 crore worth assets under development.