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June 30, 2008

Why did Subhiksha go in for a reverse merger?

In an interview to Business Standard, R Subramanian, Founder & CEO of value retail chain Subhiksha, on the company's recent move to go public via a reverse merger.

What happened to your IPO plans?
There are multiple ways of raising funds. But since markets are changing, it is very difficult to structure capital raising plans in the current situation.

However, we have good capital base and we will do whatever is needed for the company's growth. Since we have acquired a company now, we should go for a follow-on offer (FPO), which can happen anytime after the merger process is complete.

How will inflation and high rates impact the retail sector?

I see retailing of luxuries such as premium clothing and electronic gadgets growing at 10 to 15 per cent this year compared with 30 per cent earlier. I do not see much impact in food and grocery retailing.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.