V2 Retail Ltd. is evaluating a proposal to raise funds via a qualified institutional placement for its future expansion, according to Whole-Time Director Akash Agarwal.
The funds would be used for opening new stores and clearing the value fashion retailer's existing loans.
"The base for the newer stores is around Rs 750 per square foot now. So, we might increase the store opening guidance," Agarwal said during a conversation with NDTV Profit on Sunday. "And if we are valued well in the market, then we might go the QIP route in order to fund that and pay off our debts."
The plan for a QIP is currently under discussion. "If we continue with the performance and the momentum of the last two years and we have another year like that, then we would do it," Agarwal said.
He emphasised that any funds raised would be invested in the business. There are no plans for stake dilution by the promoters. The company also aims to boost Pre-Ind AS Ebitda margin from 8% in FY25 to 10% over the next two–three years.
"There are three levels that we're working on. So, one level moving from Rs 1,000-per-square-foot sale to Rs 1,200. The second level is just spreading out the head office and the warehousing cost to an even larger store footprint.
"The third level is a better product mix and selling more at full price. So, that increases the gross margin by 100 basis points," the top executive highlighted.
V2 Retail remains committed to its value-driven model with "no plan to premiumise our collection". Instead, it has chosen to unify its labels under one brand.
"It's called No Brand Only Fashion, NBOF. It is a bold statement. We're telling India that you no longer need a brand tag to be cool," he said.
"We want to focus on this segment because the cost of manufacturing a garment versus what people buy it for, there's a huge gap in the market and we're trying to bridge that gap," the whole-time director said.
Agarwal said there are no plans to significantly raise prices beyond inflation. "The current ASP (average selling price) is around Rs 300. So, it should move according to inflation. So, nothing significant; it will be a nominal growth.”
"We can easily do 3,000 stores in the same model," he added.
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