Subhiksha, the chennai based, 400 stores strong, India’s biggest grocery and pharmacy discount retail chain, is growing at a scorching pace and is bracing up to take its tally of retail stores to 750, by March 2007. During the current financial year it is also confident of doubling its 2005-06 turnover of Rs. 335 crore.
The fast growth of Subhiksha is an outcome of Rs. 300 crores it raised earlier to fund its network expansion. While, Rs. 80 crore came in the form of equity, Rs 100 crore were raised as working capital and Rs 70 crore as long-term debt. ICICI Ventures holds 24% in the company.
Subhiksha, which began selling mobile phones from Delhi, about a month ago, is betting big on this product portfolio and may, in the coming months, even consider creating a seperate dedicated chain for the same, according to an Economic Times report .
With the economies of scale already in place, Subhiksha, which presently has a portfolio of private labels for staple products, is actively creating a portfolio of private labels for a rage of other products including baby foods, edible oils, etc. This will help Subhiksha raise its profit margins.
Subhiksha, which started its journey in March 1997, from Thiruvanmiyur in Chennai, is the brain child of R. Subramanian, its Managing Director. Subramanian, who has been inspired by Mahatma Gandhi and Mother Teresa is a workholic and believes in the philosophy of doing more business with less margin than less business with more margin. “When we do more volumes we get a better deal from the suppliers,” said Subramanian in an interview earlier to an internet business portal. “If you have to stand out in the crowd and draw customers, you need to give value to the customer. At Subhiksha, we provide value to the shopper,” added Subramanian.