Smaat Aqua to make retail foray

Smaat Aqua Technologies, a Hyderabad-based manufacturer of non-chemical water and air treatment plants for institutional, commercial and industrial segments, is set to plunge into the retail arena shortly.

The company is gearing up to open a SmaatZone’ outlet each in four fluoride-affected districts of Andhra Pradesh – Kurnool, Karimnagar, Warangal and Mahabubnagar – in the second week of this July and five in Hyderabad by August in Phase-I. At present, Smaat Aqua has presence in 11 districts of the state.

“Each of the stores will have a carpet area of between 200 sft and 600 sft, and will offer low-cost and portable reverse osmosis water and air purifiers. We expect to end the current financial year with 100 stores across the country, with plans to take the retail format to all the 626 districts within three years from now,” Karunakar M Reddy, managing director of Smaat Aqua, told Business Standard.

Smaat Aqua is currently passing through the due diligence process, and is close to raising a $5-million (approximately Rs 24 crore) venture capital to fund its proposed expansion. The company already has a borrowing limit of Rs 10 crore with Andhra Bank.

The company, which clocked revenues of Rs 25 crore last year, foresees a one-fold growth this fiscal. “We will start reaping revenues from our retail business from the next financial year, which should be about Rs 1 crore from each of the stores,” he said.

To cater to the requirements of its retail business, Reddy said, the company was in the process of setting up its second manufacturing facility in Hyderabad, which will go on stream by the end of this year.

At present, the company’s existing plant, spread over 22,000 sft, has the capacity to churn out 200 units (ranging from 10 litre to 100 litre each) a month. “We are investing close to Rs 5 crore in the 50,000-sft plant, which is raised through a term-loan,” he said.