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Wednesday, Oct 26, 2005


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Marketing - Retailing
Markets - IPOs

Vivek plans IPO or private placement

R.Y. Narayanan

Coimbatore , Oct 25

VIVEK Ltd, the largest retailer in consumer durables and appliances in the country, is considering option of either going for an IPO or private placement of shares to fund expansion and a decision will be taken in the next three months.

The company is also open to the idea of roping in a strategic investor from abroad, but this will have to wait for a Government decision on allowing FDI in retail trade, according to Mr B.A. Srinivasa, Director of Vivek Ltd, Chennai.

Speaking to Business Line here, he said that the company has had several rounds of discussions with some of the top merchant bankers and it was in the process of deciding on the two options.

He expected the decision to be taken in three months and would be put in force within three months after that.

Asked about the size of the issue planned, he said that till three months back, the company was considering the question of expanding its business within the South.

But after discussions with the merchant bankers and in view of speed at which FDI is being welcomed, there were suggestions to go for a pan-Indian presence.

The issue was being debated internally and depending on the future expansion plans, the company would like to raise anywhere between Rs 50 crore and Rs 100 crore.

To a question on what made better business sense - going for an all-India expansion or limiting it to a Southern foray - he said that the question was whether one should take a measured step forward or take a plunge by choosing to take the market by storm. The issue of how much one can handle and deliver also should be considered.

Asked whether he was open to the idea of inviting FDI in Viveks, Mr Srinivasa said: "At this stage we are open."

He added that it would consider what was good for the company when the Government permitted it.

It would consider the option of getting a strategic investor or a financial investor in the company and a decision, based on a systematic study, would be taken.

He said that the decision on FDI in his company would be independent of the decision to go for an IPO or private placement and would come after the IPO or private placement.

He welcomed the idea of opening retail trade to FDI and said in whichever country this had happened, the local economy has boomed.

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