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Groom India Salon & Spa Pvt Ltd, that owns the salon chain brand Naturals, has signed a pact with Indian Overseas Bank to promote women entrepreneurship in the country.
According to C.K. Kumaravelu, co-founder and CEO of Groom India Salon, the bank has come forward to fund up to Rs 25 crore under the ‘Credit Guarantee Fund Trust for Micro and Small Enterprises’ scheme to roughly 100 women franchisees identified by the company.
Each salon will cost anywhere between Rs 25 lakh to Rs 50 lakh per salon, depending on the infrastructure and location of the outlet. While the franchisee would bring in 30 per cent of the required investment, the bank will fund up to 70 per cent without demanding any collateral, he explained.
“All these salons are expected to be up and running before the end of the current financial year,” he said.
Naturals currently has 240 salons predominantly in the South. Of this, 230 salons are franchised out and only 10 are owned and run by the company, says Kumaravelu.
To a question whether the Rs 180-crore company would take in any private equity player, Kumaravelu replied in the negative.
He said though a couple of PE players expressed interest to invest if it was prepared to change the model to a company-owned one.
“However, we have a strong feeling that the franchisee route is the best way to grow the business,” he said.
Naturals is targeting a Rs 350-crore turnover with 3,000 outlets pan-India by 2020. Asked if that isn’t that too ambitious a target, Kumaravelu says, “Five years ago, we had only 13 outlets,” came the reply.
ravikumar.r@thehindu.co.in
Source: thehindubusinessline
According to C.K. Kumaravelu, co-founder and CEO of Groom India Salon, the bank has come forward to fund up to Rs 25 crore under the ‘Credit Guarantee Fund Trust for Micro and Small Enterprises’ scheme to roughly 100 women franchisees identified by the company.
Each salon will cost anywhere between Rs 25 lakh to Rs 50 lakh per salon, depending on the infrastructure and location of the outlet. While the franchisee would bring in 30 per cent of the required investment, the bank will fund up to 70 per cent without demanding any collateral, he explained.
“All these salons are expected to be up and running before the end of the current financial year,” he said.
Naturals currently has 240 salons predominantly in the South. Of this, 230 salons are franchised out and only 10 are owned and run by the company, says Kumaravelu.
To a question whether the Rs 180-crore company would take in any private equity player, Kumaravelu replied in the negative.
He said though a couple of PE players expressed interest to invest if it was prepared to change the model to a company-owned one.
“However, we have a strong feeling that the franchisee route is the best way to grow the business,” he said.
Naturals is targeting a Rs 350-crore turnover with 3,000 outlets pan-India by 2020. Asked if that isn’t that too ambitious a target, Kumaravelu says, “Five years ago, we had only 13 outlets,” came the reply.
ravikumar.r@thehindu.co.in
Source: thehindubusinessline
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