The Hindu Business Line : Vah Magna Retail eyes rural pie

Hyderabad, April 11 As most organised retailers focus only on major cities, the Hyderabad-based Vah Magna Retail has set its eyes on the growing disposable incomes in tier-IV cities.

“Incomes in these towns have gone up significantly. There is good opportunity. We are going to open Magna stores in all the mandal (formerly taluk) headquarters,” Mr Anjaneyulu Kakkera, Chairman of the company, told Business Line.

Mr Anjaneyulu was the founder of the Trinethra retail network that he sold a few years ago to start Vah Magna.

The company, which has a network of 70 retail outlets including two in Maharashtra, would go for a pilot in five districts in the next three months.

“We will rope in franchisees and offer our expertise and assistance. After the pilot, we will scale this up,” he said.

There are over 1,000 mandals in Andhra Pradesh.

Private equity

After investing Rs 120 crore in setting up a retail space of 5 lakh sq ft, the company has initiated talks with private equity firms to infuse funds to support the overall plan to reach 25 lakh sq ft (comprising 300 stores) in the next 24 months.

“We are looking at a funding of Rs 100 crore in the next six months,” Mr Sriram Kakkera, Chief Executive Officer, said.

Recently, it opened its fourth format of Vah Magna Super Centre, which is an aggregator of top brands in apparel, food and home furnishing. Other Magna formats are hypermarkets, cash-and-carry and FoodEx supermarkets.

The company, which registered a turnover of Rs 120 crore in 2007-08, is looking at expanding the network in Maharashtra, Karnataka, Madhya Pradesh, Chhattisgarh, Orissa and Tamil Nadu in the next 18-24 months.

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