—Contributed by Vivin Wason

Retailers are taking the IPO route looking at the consumer confidence in emerging Retail Players and the merry state of the Stock market. Along with Landmark 11 other retail players are gearing up raise funds of nearly 2000 crore in 2007. These players include some of the heavy weights in Retail like Reliance Retail, Ebony Retail, Talwalkars and Subhiksha Retail along with some of the new ventures like Great Wholesale Club, Hidesign, Hotspot, Maheshwari Mega Ventures, Multiple Zones, Radhakrishna and Foodland. Others who have launched their IPOs not too long back are savoring the sweet taste of success in their short tryst with the stock market. Recently launched IPO of Koutons, which sells shirts and trousers, saw its share price jump 42% on its offer price on listing earlier this month and the company’s issue was oversubscribed 45 times. While discount retailer Vishal raised Rs110 crore in a July public share offer that was oversubscribed 69 times.

Public funds are being sought after by a large number of organized retailers in order to accelerate their organic growth process. Every retailer would like to be the first to tap a new market and create a niche for itself even before the competition arrives. A noticeable point here is that a number of these companies are family promoted or owe a major stake in the company to venture capitalists.

It’s a defining step for Indian retail. In order to keep the people invested in the company the retailers have to do better each time and have to be very sure of their expansion plans. Points such as avoiding huge investments in stock (in order to keep the cash flow in check) and handling the stores directly rather than going for a franchising model to exercise a better control over sales should be kept in mind.

Though the growth opportunity for the small and medium sized retailers certainly outweighs the threats, but it is important to understand their market segment and position themselves well with the consumers. For such retailers it is very important to have a brand name which would precede its entrance in a new territory.