Noida firm exploring GIP Mall deal for ₹2000 crore: Report

The purchase of an expansive complex covering 147 acres of land is the cornerstone of DS Group’s expansion strategy. This large tract of land has open areas and shopping centers, offering a flexible canvas for the construction of residential and commercial structures. Although the information given does not specify the exact location of this complex, it has a very strong potential to serve as a hub for retail and hospitality operations.

Credits: Hindustan Times

A Tale of Collaborators

The complex’s history is intertwined with the Appu Ghar Group and the Unitech Group, both of which played pivotal roles in its development. Unitech currently maintains a 42 percent ownership stake in the mall situated within the complex, with the remaining portions held by other entities. The collaboration between these groups adds a layer of complexity to the transaction, as DS Group navigates the intricacies of ownership transfers and negotiations.

The Weight of Debt

One crucial factor driving this acquisition is the financial condition of the complex in question. Reportedly burdened by a substantial debt of ₹1000 crore, its sale has become a necessity. This situation provides an opportunity for DS Group to swoop in and acquire the complex at a potentially favorable price. The injection of fresh capital could be instrumental in rejuvenating the complex and unlocking its latent potential.

Fueling DS Group’s Retail Aspirations

The foray into the retail and hospitality industries by DS Group is part of a larger project. Recent purchases, like the July acquisition of Bengaluru’s Viceroy Hotel, have demonstrated the company’s increasing interest in these fields. Although the complex offer is a component of a larger plan, it shows DS Group’s desire to become a major player in these industries.

Financial Prudence and Flexibility

Notably, DS Group’s approach to funding the Viceroy Hotel acquisition provides insights into its financial capability. Initially planning to use internal accruals to pay for the ₹300 crore Viceroy deal, the company eventually secured a small loan. This willingness to pay upfront for such acquisitions suggests that DS Group is well-positioned financially and is determined to pursue its strategic objectives without undue delay.

Possible Impacts of the Move

Strengthening Retail and Hospitality Footprint: DS Group’s expansion into these sectors aligns with the company’s overarching growth strategy. With a considerable financial backing and a history of successful ventures, DS Group has the potential to significantly strengthen its position in the retail and hospitality industries.

Revitalizing the Complex: The acquisition of the debt-laden complex presents an opportunity to breathe new life into a previously struggling property. DS Group’s investment and expertise may lead to the development of a vibrant commercial and residential hub, revitalizing the local economy.

Industry Reshuffling: DS Group’s entry into the retail and hospitality sectors may trigger a reshuffling of the competitive landscape. The conglomerate’s expansion could inspire other companies to pursue similar opportunities, fostering increased competition and innovation.

Economic Stimulus: The acquisition could have positive economic ramifications, both locally and nationally. Job creation, increased footfall in the malls, and new residential units can stimulate economic growth and provide tangible benefits to the region.

Complex Ownership Dynamics: Managing the complex with shared ownership, especially with Unitech’s involvement, could pose a challenge. DS Group will need to navigate complex ownership structures and potential disagreements to ensure smooth operations.

A Diverse Conglomerate

It’s worth noting that DS Group is not a newcomer to the business world. With an impressive annual revenue of ₹5500 crore in FY 2023, the company boasts a diverse portfolio that includes ownership of six hotels, retail chains, coffee chains, and its original business ventures. This expansion into the retail and hospitality sectors is the latest step in DS Group’s ongoing evolution and diversification.

In summary, DS Group’s bold move into the retail and hospitality industries through the possible purchase of a sizable complex signifies a big shift in the corporate scene. The conglomerate is well-positioned to have a significant impact in these industries thanks to its strong financial position, diversified portfolio, and strategic vision. Even if there are difficulties, such as handling intricate ownership relations, the benefits for DS Group and the economy as a whole appear bright. This project will be extensively observed for its potential to change the competitive dynamics of these industries in addition to its immediate impact.

Originally posted 2023-10-18 19:09:53.