Abstract

Subhiksha was India’s largest retail chain based on number of stores. In December 2008, it shut down over 90 stores around the country. Subhiksha, which had started as a single outlet in Chennai grew rapidly and in a span of 11 years, the company had over 1,600 outlets throughout the country. The company had been facing a financial crunch which it revealed publicly only in January 2009 though it was not in a position to pay rents or employee salaries or other outstanding bills. The management of Subhiksha said that the problem faced by the retail chain was due to its inability to raise enough equity and was not because of its business model, which was very efficient. Experts too felt that the crisis faced by the retail chain was due to the management’s decision to not opt for an Initial Public Offering.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Business model
• Financial crisis
• and Corporate debt restructuring

Keywords

Financial crisis, corporate debt restructuring, business model, initial public offering, IPO, retail, Subhiksha