2. Kundan Group Genesis Originally from Andhra Pradesh, the Kundan family took roots in Pune almost a century ago. The founder of the Group, Late ShriGangadasKundan migrated from Andhra Pradesh to Pune in Maharashtra in 1910.
3. Kundan Group In 1954, Gangadasji launched an outlet in Pune for shirting and suiting with a local partner. Subsequently he established his own unit under the banner ‘Kundan & Sons’ in 1964. The firm was awarded ‘Largest Seller’ of the branded VimalShirtings & Suitings. The firm also achieved similar Best Sales Award for reputed Raymond and Digjam brands. In 1975, launched KundanWoollenswhich steadily grew in popularity beyond Pune city.
4. Kundan Group In 1983 ‘Kundan Collections’ acquired premises at a prominent location on the prestigious Laxmi Roadwhichis even today the most favored and preferred market area in the heart of the city. The younger generation made its foray into the family business by launching tailoring firm, Vijay Men’s wear. Today ‘Vijay Men’s Wear’ has 50 fully automatic sewing machines. In 2000 Kundan Creations was born in another prominent business location, Tilak Road.
5. Kundan Group Present Management and Organizational Structure Late Gangadasji Gangadhar Vijaykumar Nandkumar Dinesh Ranjeet Prasad
6. Kundan Group Profile of Group firms Kundan Collections presently housed in a four-storeyed show room spread over 8500 sq.ft.on Laxmi Road fully air-conditioned Shirting, suiting, readymade gents’ wear showroom selling branded jeans and trousers, branded shirts and T-shirts, ethnic wearand men’s accessories like ties, cuff-links, belts etc separate section for ladies’ readymade wear and accessories
8. Kundan Group Profile of Group firms Kundan Creations presently housed in a three-storeyed commercial property of 4500 sq. ft. on Tilak Road exclusive show room for ladies selling high quality silk saris, exclusive work saris and cotton as well as fancy saris western outfits, Punjabi dress materials and readymade garments and accessories etc separate section for ladies’ readymade wear and accessories
10. Kundan Group Profile of Group firms Vijay Men’s Wear own production facility with 50 automatic sewing machines a wholesale segmentundertakes bulk orders from Institutions and commercial organization for uniform dresses retail segment caters to the walk-in customers referred by Kundan Collection at Laxmi Road
13. Kundan Group Other Financial Information Present daily turnover of the group stands at Rs. 0.22 million/dayfor 320 days/year The sales figure appears reduced over the period 2008-2010. This is on account of the economic impact of the global recession, however, the partners took certain measures to maintain the profitability The market value of the fixed assetsof the firm are presently estimated at Rs. 188.60 millionagainst the borrowing of Rs. 100 million
15. Kundan Group Business plan In order to handle our growing demand and increase our presence in the market further, we have decided to go for a major revamp and restructuring of our business. To achieve that objectivewe have chalked out short-term expansion plans and are in the process of detailing the long-term growth strategy for the group.
16. Kundan Group The short-term plan Renovation of the existing 8,500 sq. ft. facility of Kundan Collections at Laxmi Road Renovation of front elevation of Kundan Collections with toughened glasses and Alcomate paneling with imported light elevation. Addition of two new departments on the first floor, creating new sections for women’s wear such as Silk Sarees, Shaloos and Dress Materials. Creation of new stock and furniture, fixtures and flooring. Renovation of the existing floors giving them a modern look
17. Kundan Group Renovation of the existing facility at Tilak Road Renovation of front elevation with toughened glasses and Alcomate paneling with imported light elevation. Addition of new departments on the second floor, creating new sections for women’s wear such as Silk Sarees, Shaloos and Dress Materials. Creation of new stock Painting Polish work on the existing floors giving them a modern look
18. Kundan Group The long-term growth strategy Sustained advertising in media to create a strong image as a clothing destination. Additionally,Government Business worth Rs. 100 million per annumand withnet margin of 20% (pre-tax)under tie-up
19. Kundan Group Budgeted total investment For this entire project we require finance to the tune of Rs. 65 millionfor a period up to 10 years.
20. Kundan Group Utilization Plan To reduce Debt by Rs. 50 million To create infrastructure for ladies section at Laxmi Road showroom and creating additional infrastructure for government business, with a total cost of Rs. 5 million Working capital Rs. 10 million for supply of stitched & tailor made uniforms to industries, corporate clients, institutional clients and school students. Working capital involves purchase of uniform clothing and recruiting skilled tailors
21. Kundan Group Repayment Plan Total repayment period up to 10 years (minimum 5 years). Rate of return to investors proposed – 8% p.a. of return in case of tenure of 5 years 10% p.a. of return in case of tenure of 7 years 12% p.a. of return in case of tenure of 10 years Repayment by way of half-yearly or yearly interest as per the choice of investor Remittance byEFT or SWIFT
22. Kundan Group Repayment Plancontd. The principle amount to be repaid @Rs. 25 million p.a. in the last two years of the tenure Agreement to sell property in favor of investors or their nominee in order to provide security comfort
23. Kundan Group Rationale behind USD investment Promoters have a close relative in the USA, and he is their local representative. His acquaintance and proximity to the potential investors provides a vital comfort USA is the second largest hub of the non resident Indians (NRIs) US-based NRIs, who have the second highest investment in the Indian business entities Indians prefer USD for remittances and investments
24. Kundan Group Options for repayment of the invested corpus and interest Investment of Rs. 65 million to be remitted through SWIFT or through any bank in India, by a local check. Investors may pool the corpus under the names of a single or multiple representatives, holding the entire corpus in their name in the firm’s balance sheet. Under Indian Partnership Act, the number of partners can be up to 50.
25. Kundan Group Options for repayment of the invested corpus and interestcontd. Repayment of the investment corpus remitted through the same mode and account through which the original investment is routed Payment of interest can be half-yearly or yearly and credited either to the local Non-resident’s ordinary account(s) of the investors or it can be paid to their local relative(s)/representative(s) under legal framework. Else, the interest can be remitted electronically to the investors’ account(s) in the USA.
