Biyani's Pantaloon to raise Rs1000 crore through bond issue

The Kishore Biyani-promoted Pantaloon Retail India Ltd on Tuesday announced that it will raise additional long-term funds of up to Rs1,000 crore through issuance of securities to various investors.

The company has received the approval from its board for raising funds through issuance of equity-based securities to its investors by various means, including public or private offerings or qualified institutional placement, it said.

The company is also mulling over merger of its subsidiary firm Home Solutions Retail (India) for better synergy and efficiency in the retail business.

Biyani, Pantaloon's chief executive, told CNBC-TV 18, ''We cannot do a placement to private equity players. So we will have to look at other options of raising this money.''

He said the long-term funds could be raised in one or more tranches via public-private offerings (QIP) and / or a preferential allotment. "The whole plan of the group is to raise, in the next 18-24 months, around Rs3,000-4,000 crore," he said.

Asked for details, Biyani said, ''We haven't fixed anything. This is the enabling resolution and once we have the shareholders approval we will plan it.'' He said he did not expect equity dilution of more than 5-7 per cent.

On the purpose of the fund-raising, he said, ''We as a retail company are at around 13 million sq ft of retail space. We believe the worst is behind us, and in the last three weeks we believe the normalcy in consumption is up to 95-97 per cent of what the peak we achieved. So we believe the consumption is back; the operating parameters are now in our favour in terms of retail, real estate cost, efficiencies and people cost.

''I think a lot of things have changed favourably. So we want to go ahead with our plans of expansion and we had a vision of doing 30 million sq ft by 2012. I think this would get extended to 2013-2014 and for that we need to raise money.''