Vishal Retail postpones IPO plans

Written by Agencies | New Delhi, July 31: | Updated: Jul 31 2008, 22:16pm hrs
Homegrown retail major Vishal Retail, which a month back had announced plans to raise up to Rs 200 crore through IPO, has postponed the equity divestment considering the current market sentiments.

"Besides the present fluctuation in the market, we are also facing certain technical problems as regards to the allotment of minimum floor price by market regulator SEBI.

While SEBI has fixed the floor price of our shares at Rs 650, we believe under present conditions we cannot expect that kind of high price," Vishal Retail Chief Executive Officer Manmohan Agarwal said.

The company wanted to raise the money to fund its expansion plans would now wait for the market to stabilise.

Agarwal said the company would wait and watch for some more months before deciding upon the equity divestment. When asked about the percentage of dilution the company would opt for, Agarwal said, "the percentage of dilution and the price band would be decided later."

He, however, added that the company's expansion plans would not halt for lack of equity sharing. "We have alternative methods of securing finance, including debt route, that we may opt for. We have also taken steps to increase our operational efficiency," Agarwal added.

He said the company would be investing Rs 300 crore this year to set up around 65 additional stores across the country.

"We have 126 stores and are adding another 65 odd stores to take our total number to 190 by end of the current fiscal. The expansion plan would not be hindered," Agarwal added.