Trent to raise up Rs300 crore to expand

Tata Group retail firm Trent plans to raise up to Rs300 crore through the issue of securities, which could include equity, to fund future expansion plans. The operator of Zara stores in India wants to expand both locally and internationally.

“It is proposed to issue securities for an amount not exceeding Rs 300 crore in one or more tranches... The fund-raising programme may be through a mix of equity/debt/ equity-related instruments,” the company said in a filing to the Bombay Stock Exchange, the company said it has sought shareholder’s approval through a postal ballot to raise the funds.

The firm said that it has been pursuing various growth opportunities, in line with its objective of becoming a leading organised retail company in India. In addition, the funds raised will be used to “selectively commit direct investments in certain retail estate developments and general corporate purposes’’.

Trent said while it has not identified any instruments at this stage, in case of the issue of equity-linked instruments, these would not exceed 20 per cent of the paid-up equity share capital of the company.

Established in 1998, Trent operates the ‘Star Bazaar’, ‘Fashion Yatra’, ‘Sisley’ and ‘Zara’ stores in the country, along with the ‘Landmark’ and ‘Westside’ stores. It has a total of over 90 stores across India. In the 2009-10 fiscal, the company had reported revenues of Rs 587.48 crore and a net profit of Rs 40.22 crore.

This is not the first movement that Indian investors see this autumn. Just one month ago, Pantaloon Retail India Ltd (PRIL), part of retail giant Future Group, planned to raise up to Rs1,500 crore by issuing equity-linked securities. The company's titles soared on the Bombay Stock Exchange the day after. The company's board decided to raise up to Rs1,500 crore by issuing securities either through convertible instrument, convertible into shares, debt instruments with warrants, giving right to the holder to subscribe for equities.

The board directed the company that it should ensure that overall dilution of equity is within 15 per cent and the debt equity ratio is not to exceed 1.33. Pantaloon Retail is the flagship of the Future Group and operates multiple retail formats in the value and lifestyle segments. Its brands include Pantaloons, a chain of fashion outlets; Big Bazaar, a hypermarket chain; Home Town; Food Bazaar, a supermarket chain; Central, a mall; and eZone, an electronics chain.
 
Angela González-Rodríguez