Subhiksha Case Study
Subhiksha leads none to Subhiksha (prosperity) S Shivakumar
03 March, 2009
?Anything well begun is half done? ? so goes a saying. But those behind Subhiksha apparently wanted to prove it wrong. Unfortunately, they have succeeded and are poorer for it. Mind you, a private equity player stayed on the sidelines all along!
SUBHIKSHA, THE ailing retailer, is mired in controversy. Bitter accusations and recriminations between ICICI Ventures on the one hand and Subhiksha’s promoter and managing director R Subramanian, on the other, are aggravating the situation. Who is right and who is wrong? Success has many takers and failure, none. And faults are thick when love is thin. Just take a look at what ICICI Ventures, a minority shareholder in Subhiksha with a 23 per cent stake, said of Subhiksha, not long ago: “Subhiksha is a retail chain built on a unique business model with no frill stores in the neighbourhood area offering 8-10 per cent discount on Maximum Retail Price (MRP) on all products sold throughout the year. Promoted by R Subramanian, an alumnus of the Indian Institute of Management Ahmedabad, Subhiksha has been the pioneer in the organised discount retail model in India. The company seeks to provide a one-stop shop for all daily shopping needs of a consumer and sells FMCG products, food and groceries, pharmacy products and mobiles. With strong backward linkages and carefully crafted supply chain arrangements, the business model is built such that consumers will benefit hugely from the constant everyday low prices, along with the convenience of neighbourhood shopping that they are used to. The Company started its operations in 2000 in Tamilnadu and has rapidly scaled up its presence in New Delhi, Mumbai, Karnataka, Gujarat and Andhra Pradesh. By 2007-08, Subhiksha plans to be a pan-India retailer with at least 1,000 stores operational.”
To this day, this description of Subhiksha appears on the website of ICICI Ventures! What does ICICI Ventures say
03 March, 2009
?Anything well begun is half done? ? so goes a saying. But those behind Subhiksha apparently wanted to prove it wrong. Unfortunately, they have succeeded and are poorer for it. Mind you, a private equity player stayed on the sidelines all along!
SUBHIKSHA, THE ailing retailer, is mired in controversy. Bitter accusations and recriminations between ICICI Ventures on the one hand and Subhiksha’s promoter and managing director R Subramanian, on the other, are aggravating the situation. Who is right and who is wrong? Success has many takers and failure, none. And faults are thick when love is thin. Just take a look at what ICICI Ventures, a minority shareholder in Subhiksha with a 23 per cent stake, said of Subhiksha, not long ago: “Subhiksha is a retail chain built on a unique business model with no frill stores in the neighbourhood area offering 8-10 per cent discount on Maximum Retail Price (MRP) on all products sold throughout the year. Promoted by R Subramanian, an alumnus of the Indian Institute of Management Ahmedabad, Subhiksha has been the pioneer in the organised discount retail model in India. The company seeks to provide a one-stop shop for all daily shopping needs of a consumer and sells FMCG products, food and groceries, pharmacy products and mobiles. With strong backward linkages and carefully crafted supply chain arrangements, the business model is built such that consumers will benefit hugely from the constant everyday low prices, along with the convenience of neighbourhood shopping that they are used to. The Company started its operations in 2000 in Tamilnadu and has rapidly scaled up its presence in New Delhi, Mumbai, Karnataka, Gujarat and Andhra Pradesh. By 2007-08, Subhiksha plans to be a pan-India retailer with at least 1,000 stores operational.”
To this day, this description of Subhiksha appears on the website of ICICI Ventures! What does ICICI Ventures say