The Hindu Business Line : Azim Premji takes 10% stake in Subhiksha

Post this deal, the shareholding pattern of the company translates as promoters 59%, ICICI Venture 23%, Premji 10%, ICICI Prudential Mutual Fund 5% and employees’ stock options 3%.

Vinay Kamath

Chennai, Sept. 4

Wipro Technologies’ Chairman, Mr Azim Premji, has taken a 10 per cent stake in discount retail chain Subhiksha Trading Services.

According to sources, Mr Premji’s investment company, Zash Investment Pvt Ltd, has invested Rs 230 crore in Subhiksha by acquiring a part of ICICI Ventures’ 33 per cent stake in the retailer.

Post this deal, which happened couple of months ago, the shareholding pattern of the company translates as promoters (led by Mr R. Subramanian, Managing Director) 59 per cent, ICICI Venture 23 per cent, Azim Premji 10 per cent, ICICI Prudential Mutual Fund 5 per cent and employees’ stock options 3 per cent.

This deal, according to sources, reflects Mr Premji’s confidence in the retail sector and in the Subhiksha chain. Mr Premji, who owns over 80 per cent of Wipro’s stock, has invested in his personal capacity through his investment company. He is believed to have invested widely in many sectors and has a large investment portfolio.

Subhiksha has scaled up rapidly in the past year and has a pan-India presence with 1,590 stores spanning grocery to mobile phones with an avowed plan of entering the consumer durables space.

In June, it acquired a little known listed company Blue Green Constructions and intends to seek a listing through a merger with this company. This deal values Subhiksha at Rs 2,300 crore.

In July asked by Business Line about an impending exit from Subhiksha, Ms Bala Deshpande, Senior Director, Investments, ICICI Venture and a board member of Subhiksha said: “We look at what works best for the company and shareholders; the company’s interests are first. We will look for an opportune time.”

ICICI Venture was one of the earliest investors in Subhiksha in the year 2000, and then invested in three further tranches in 2004, ’05 and ’06.

Typically, according to Ms Deshapande, the venture capitalist stays invested in a company for about five years.

Subhiksha’s Managing Director, Mr R. Subramanian, an IIT and IIM-A graduate, has stated his objective of making Subhiksha a $5-billion company and the country’s largest retailer by 2011.

More Stories on : Mergers & Acquisitions | Retailing | Wipro Ltd

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