NEW DELHI: BK Modi-promoted Spice Group on Sunday bought 100% stake in the Indian arm of Cellucom, a Dubai-based mobile retail chain. According to the share-swap deal, Cellucom will take 26% stake in Spice Group’s mobile retail venture HotSpot while Spice Corp will buy 100% shares in Cellucom.
“It’s a cash-less deal in which we will swap shares. We are buying 100% stake in Cellucom. The CEO and CFO of HotSpot will retain the positions in the new entity. Spice Corp will invest Rs 100 crore in the retail chain this year,” BK Modi, chairman, Spice Group, said.
The new entity is expected to gross about Rs 1,000 crore in revenue by fiscal year 2009. Cellucom has about 120 mobile and IT product stores in the country. HotSpot has about 500 mobile retail stores, the second largest after Essar-promoted The Mobile Store that has 1,400 outlets.
For the time being, Cellucom stores may be renamed as HotSpot Cellucom. The Spice Group is expected to announce a new brand for the merged entity, which has over 2,200 employees. Commenting on the buyout, Mr Modi said: “It is a part of Spice Corp’s global acquisition strategy.
Last year, we saw a lot of M&A activity in the telecom sector in India. With this acquisition, we are the first company to begin a buyout spree in the retail space, which has been struggling under the pressure for margins for quite sometime now.”
The Indian mobile handset market is estimated to be worth about Rs 30,000 crore with most handsets being sold in the unorganised market. India has about 380 million mobile subscribers and figure is expected to reach the 500-million mark by 2010.
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