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Pe Investors Plans To Obtain 15% In Nahar Retail
Thursday, December 27, 2007

Citibank, Deutsche Bank and Sequoia Capital are in talks with Ludhiana-based Nahar Industrial Enterprises (NIEL) to have a 15-20% stake in its fully- owned division Nahar Retail for Rs 120 crore. Nahar Retail is a Cotton County retail chain, with an extensive chain of 400 stores all over.

According to sources a deal with one of these three PE players is expected to be closed in a month's time. It also said that the company will go in for an IPO in 2009. The exact stake is not yet clear but it is anticipated at something between 15-20% region.

Nahar Retail, which is a proud owner of 400 stores in 300 cities at present, started the Cotton County apparel retail chain three years ago. The company plans to take it to 500 by this fiscal-end at an investment of Rs 30 crore. Nahar Retail, which clocked revenue of about Rs 100 crore last fiscal, is targeting a figure of Rs 250 crore this fiscal.

Meanwhile, NIEL, which is an integrated textile company present across the value chain from yarn to fabric and garments, has seen its share price move up rapidly, of late.

The share price moved up 64% in a month to close at Rs 144 on Wednesday. NEIL also has a sugar manufacturing facility and captive power plants. At Wednesday's share prices, NIEL's market cap would be close to Rs 580 crore. On a consolidated basis, NIEL reported gross sales of Rs 928 crore and a net profit of Rs 74 crore for the year 2006-07.

Cotton County retail chain, which started as a north Indian tier II city phenomenon, is now spreading its wings aggressively into South and West India. It is also ramping up operations in metro cities such as Delhi and Mumbai. As of now, the retail is a complete range of men's wear. It has started test marketing women's wear in a few stores and in the next couple of months plans to retail the full range across its stores.

The company is also eager to target the NRI market with plans to open its stores in the Middle East, which has a sizeable NRI population. It is exploring partners who can set up stores through franchisee routes - the same model, which the company follows in India.



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