No IPO plans for Big Bazaar yet

While the Future Group is going all out in its efforts to bring its debt-ridden

retail business back on track, the company has no immediate plans to take the Big Bazaar chain public. Looking at the low retail investor interest, the company has decided against launching an IPO for the company since it believes that no retail IPO can succeed without the participation of investors.

According to Rakesh Biyani, Joint Managing Director of the Future Group, unless there are significant changes in the economic activities in India that gives more confidence to retail investors to come back to the markets, floating an IPO is not the right answer for the Indian market. The retail sector has been witnessing dull business since last few months owing to a slowdown in the April-June quarter, particularly in May, high inflation and low consumer sentiment. Obviously store sales continue to suffer on the lower side rather than achieving the desired level.

But Biyani is optimistic about the opportunities India holds and feels that retail is just going through an interim phase. Moving forward, with consumers becoming more aspirational and the growth of middle class consumers, it will create demand.

The company has witnessed good response to its discount season that was on at all its retail stores over the past six weeks and the Big Bazaar ‘Maha Bachat’. And though the consumers are only responding when the prices are low, its margins are more or less in line with what the it expected for July. In August, it hopes to slightly improve on margins.