Akshay Kumar and Raj Kundra-promoted home shopping channel Best Deals TV is looking at raising Rs 100 crore in the second round of fund raising. The channel was launched in March this year and has already raised Rs 30 crore in the first round of fund-raising when the promoters divested 15 per cent stake to UY Industries, a Mumbai-based firm with interest in real estate and information technology.
Best Deals TV is a home shopping channel that capitalises on celebrity endorsement. It is a platform where brands with a celebrity associated with it (as owners or co-partners in most cases) are told via the tele-shopping model. It launched with a range of apparel and accessory products under actor Shilpa Shetty’s brand.
The second round of funding will be through equity infusion and PriceWaterhouseCoopers is the auditor in the process. The channel will target both private equity funds and high net worth individuals in the second round of fund raising. The round will be completed in a month or two according to the company.
The proceeds will be deployed for enhancing the back-end of the channel in terms of warehousing and logistics, advertising and marketing and to launch regional channels. At present, the channel operates with one warehouse in Bhiwandi and wants to establish two more – one each in north and south India.
“We have seen good response to the channel and currently sell products worth Rs 10 to 12 lakh a day. Our research tells us that the celebrity led approach has helped push sales even when the average ticket size of the products is between Rs 1,500-1,800. This insight has been used to zero in on South India as the first territory to launch regional channels. It is a celebrity crazy market and has space for new entrants in the home-shopping genre,” said Hemant Vastani, chief financial officer at Best Deals TV.
He added that the company’s gross margins are already in line with the average gross margins in the home-shopping channel genre at 35 per cent.
The first of such regional channels will be in Tamil Nadu in association with Tamil superstar Vikram. The team is preparing for the launch of the channel over the next couple of quarters.
After Tamil Nadu, the channel will look at expanding into other south Indian states like Andhra Pradesh.
The advertising and marketing bit will kick off once Best Deal TV has its distribution completely streamlined. The channel may also look at an initial public offering in FY17.