The drugstore chain which has been expanding at a rapid rate in Delhi is about to have a problem.
A group of private-equity firm Kalaari Capital Group is set to start an aggressive expansion of its business in the city.
The company, which has also been investing in smaller retail companies in the last few months, plans to open a dozen more drugstores by the end of 2019.
The plan is to expand to 60 outlets by 2020.
The drugstores would be owned by a consortium led by private-sector venture capital firm Kleiner Perkins Caufield & Harcourt and a local partner.
The chain will be led by the former chairman of pharmaceutical company AstraZeneca India, Nirmala Srivastava, who was appointed as the brand ambassador by the government.
The firm’s main rival is India’s No 1 private-label manufacturer and wholesale drugmaker, Teva, which operates the country’s largest pharmacy chain, the National Pharmaceutical Corporation of India.
“The retail market is already saturated and the entry of Kalaaris is a good thing,” said Suresh Kumar, a partner at Kleiner’s Mumbai office.
“It is a sign that India is on the right path towards a more diversified, more globalized and integrated drugstore system.”
Kalaaris, which started in 1991 and has a total of about 100 stores across the country, has expanded to 10 new drugstore locations.
The chain is currently expanding to 50 outlets in Delhi.
Its current stores in Delhi, New Delhi and Mumbai are run by two local partners.
“We are not afraid of competition,” said Mr Kumar.
“The brand ambassador will help us attract customers and keep the stores fresh and new.
We will make sure the brands are well-known and their products are well sold.”
The company also plans to expand its drugstore footprint further.
The expansion plans include an expansion of the number of retail outlets in India, and the presence of additional outlets at a new shopping mall in New Delhi.
“We will be opening more than 10 more stores in 2019, in cities like Mumbai, Bengaluru and Chennai,” said a person with direct knowledge of the plans.
“Kalaari is also eyeing to expand into other cities, such as Bengaluru.”
The expansion plans have been endorsed by the state government.
“This is the best development for our health sector and the retail sector,” Health Minister K.J. Panneerselvam said.
The government is also keen to open up retail outlets to more small businesses and startups, in a bid to attract a more educated and entrepreneurial population.
The plan to expand in the retail market comes amid the government’s push to attract more foreign investment into the country.
According to a report by India Today, the number and pace of foreign investment has risen in recent years, especially from the US, which is India of the world’s largest investor.