Shopper's Stop Limited - Securities and Exchange Board of India

We face competition for customers from other departmental stores, specialty stores and
other retailers in the organized and unorganized markets. We expect competition could
increase with new entrants coming into retail industry and existing players consolidating
their positions.
Our competitors may not be focused on profitable growth in the short term and this could
disturb the retail industry’s profitability dynamics. Some of our competitors may have
access to significantly greater resources and hence the ability to compete more
effectively. As a result of competition, we may have to price our merchandise at levels
that reduce our margins, increase our capital expenditures in order to differentiate
ourselves from other retailers and increase our advertising and distribution expenditures,
which may adversely affect our business. With increased number of retailers in the
market there may be increased competition for good store locations impacting our costs.
19. The success of our business is substantially dependent on our management team,
our inability to retain them could adversely affect our businesses
We have a strong team of professionals to oversee the operations and growth of our
businesses, including our Customer Care Associate, Managing Director and CEO and
several key managerial personnel. Our success is substantially dependent on the
expertise and services of our management team. The loss of the services of such
personnel may have an adverse effect on our business, financial condition and results of
operations.
20. Our Promoters will collectively own 67.09% of our Equity Shares and will continue
to control us after the Issue
After giving effect to the Issue, our Promoters will collectively own 67.09% of our Equity
shares (on a fully diluted basis). As a result, our Promoters will have the ability to
determine the outcome of all actions requiring the approval of our Shareholders, other
than those actions requiring supermajority votes and the appointment of the Company's
Board of Directors. The interests of our Promoters may conflict with interests of our other
investors, and you may not agree with the manner in which they excerise their voting
rights and powers they take.
21. Future sale of Equity Shares by some of our current shareholders could affect the
price of our Equity Shares in the secondary market.
The market price of our Equity Shares could be impacted if some of our existing
shareholders sell a substantial number of Equity Shares post listing. As per the
provisions of the SEBI (Venture Capital Funds) Regulations, 1996 and amendments
thereto the share capital held by venture capital funds registered with SEBI are not
subject to any lock-in requirements and are freely transferable. Employees other than
promoters holding equity shares pursuant to employee stock option are not subject to any
lock-in requirements and are freely transferable pursuant to SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999. Venture
capital funds i.e. ICICI Trusteeship Services a/c ICICI Emerging Sectors Fund, and Sara
Fund Trustee Company Limited A/c South Asian Regional Apex Fund registered with
SEBI hold 1,875,000 and 390,625 Equity Shares respectively, aggregating to 2265625
Equity Shares equivalent to 6.59 % of our post issue capital (on a fully diluted basis.)
Sales of substantial amounts of our Equity Shares by existing shareholders, or the
perception that such sales or distributions could occur, could affect market prices for our
Equity Shares.
22. We rely extensively on our IT systems and failures could adversely impact our
business
We rely extensively on our IT systems to provide us connectivity across our business
functions through our software, hardware and connectivity systems. Our business
processes are IT enabled, and any failure in our IT systems or loss of connectivity or any
loss of data arising from such failure can impact us adversely.
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