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Sangeetha Mobiles to raise Rs 100-cr PE fund

Gireesh Babu  |  Chennai 

Bangalore-based mobile phone retail chain, Sangeetha Mobiles Private Limited, is planning to raise Rs 100 crore through the private equity route to fund its pan-India expansion besides launching its private-labelled GSM mobile handset.

The company expects its retail business to grow from Rs 400 crore last year, to Rs 600 crore this financial year, according to L Subhash Chandra, managing director, Sangeetha Mobiles.

“We are in talks with some PE investors and are looking at raising around Rs 100 crore for our expansion plans. We may also look at foreign direct investment (FDI) with some of the big PE investors, once the FDI norms are set in place,” he said.

The company, which had acquired Wavetel Mobiles, a mobile retail chain in Tamil Nadu, for around Rs 13 crore, currently has more than 150 stores across three states – Karnataka, Andhra Pradesh and Tamil Nadu. Plans are to increase the number of stores to 200-250 by the end of the current financial year. The company would look at master franchisee options to expand in the other states.

“While south India has at least three to four strong players in the mobile retailing business, there is a huge vacuum for multi-brand mobile outlets in other parts of the country. We are expecting to tap that market with the proposed PE fund,” Chandra added.

Sangeetha Mobiles would look at monetising the PE funds in tranches, as per the requirement for phased expansion and would look at a total investment of around Rs 50 crore this year.

The company had, in 2002, ventured into selling its own CDMA (code division multiple access) brand, Eurotel, which was supplied to Tata Indicom to be sold in the six states it had operations in. However, it would have sold only around 100,000 handsets before the CDMA ceased to be a trend.

This time, the company would be looking at launching GSM models, which would be manufactured by third-party and sold exclusively through its own retail outlets.

“We expect the project to start with an investment of Rs 10 crore. The time for launch and the pan-India expansion of retail stores depends on the availability of funds,” Chandra said, adding that the company was evaluating options to set up retail outlets in Sri Lanka.

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First Published: Thu, June 28 2012. 00:32 IST