IKEA invests additional Rs.600 crores in Indian business
IKEA is a Swedish multinational business with headquarters in the Netherlands that creates and markets ready-to-assemble furniture, kitchen gadgets, home decor, as well as other products and services. IKEA, which Ingvar Kamprad founded in 1943, has held the title of the largest furniture shop in the world since 2008.
The group’s interior design work is frequently connected with minimalism, and it is most recognised for its modernist designs for various sorts of appliances and furnishings. The company is also renowned for its focus on cost management, operational details, and ongoing product development, which has allowed IKEA to reduce its pricing by an average of two to three per cent.
Financial information received by business intelligence platform Tofler indicates that Ikea India Private Limited, a chain of home furnishings stores, has funded Rs 600 crore. Ikea India Private Limited is a member of the Ingka Group, which also comprises IKEA Retail and Ingka Investments.
Recently, Ingka Centres, a member of the Ingka Group, announced that it would invest close to Rs. 7,500 crores in the construction of two shopping centres in the NCR.
The money would go toward Ikea’s aspirations for growth in India. The Netherlands-based Ingka Pro Holding BV and Ingka Holding Overseas BV received 60 crore shares of Ikea India Ltd. with a par value of Rs 10. On September 8, 2022, the bulk of the equity shares was issued to Ingka Holding Overseas BV.
When questioned about the development, an Ikea spokeswoman responded that the company is committed to India and that the nation has been identified as a potential future growth market for the Ingka group.
“IKEA is committed to India, and India is identified as a future growth market for the Ingka group. The fund infusion received is part of the Rs 10,500 crore announced initially. This new infusion will support our omnichannel expansion plans in India to enable us to reach many more people in India for their life-at-home needs with our affordable and sustainable products,” stated the spokesperson.
The purchasers welcome both Ingka Professional Holding BV and Ingka Holding Abroad BV. According to data from the enterprise intelligence platform Tofler, Ingka Holding Abroad BV has provided almost all of the funding, while Ingka Professional Holding BV has provided the remaining funds. Each company is a member of the Ingka Group, which owns and runs Ikea Retail. Earlier this year, the company invested Rs 850 crore in the India business. Ikea has been attempting to increase its presence in India by opening stores across several sectors. Along with completing online orders in a few cities, it runs a mix of big and small format retail stores.
The furniture store has so far opened three Ikea stores with a large format that are currently operating in Hyderabad, Navi Mumbai, and Bengaluru. Mumbai saw the opening of two metropolis middle stores in December 2021 and July 2022. In the cities of Mumbai, Pune, Hyderabad, Ahmedabad, Surat, Vadodara, and Bengaluru, it is currently available online. In fact, the guardian company has also planned to use Ingka Centers to build large-format shopping centres around the nation. The guardian Ingka Group has pledged to invest €900 million (about Rs. 7,266 crores) in the construction of two massive shopping centres in the Delhi-NCR. The construction of Gurugram’s Ingka Heart, which will cost $3,500 crore, is possible by the second half of 2025. This can be implemented in the same middle in Noida. According to information received by Tofler, Ikea’s India unit reported a gross loss of 807.5 crores in FY21 and a loss of 720.7 crores in the previous year. Ikea India Pvt. Ltd.’s web sales increased 7.36% to 607.7 crores during the fiscal year that ended on March 31, 2021. Since COVID boosted the value of outdoor spaces, the company has shifted its focus to more open areas.