KOCHI: Lulu International Shopping Malls Pvt Ltd (LISMPL), the India arm of Abu Dhabi-based Lulu Group, is doubling down on its Indian expansion.
With a planned capital expenditure of Rs2,500–Rs3,000 crore between FY2025 and FY2028 for new malls, land acquisitions, and standalone hypermarkets – including a large-format mall in Ahmedabad – the Lulu group appears intent on deepening its presence in India’s retail real estate space.
Too much debt?
But this growth is being powered largely by debt. According to a leading rating agency, Lulu International’s total bank facilities swelled by Rs1,000 crore in FY2024 – from Rs3,957.5 crore to Rs4,957.5 crore. The company’s debt protection metrics remain modest, with interest coverage ratios of 1.2x in FY2023 and 1.1x in FY2024.
“For a retail-led operator, this level of coverage indicates narrow headroom for servicing interest costs, especially in a high interest rate environment,” said a finance expert while talking to businessbenchmark.news
The company’s liquidity position is described as adequate, supported by expected operating cash flows and a refinancing plan for its near-term obligations. Lulu has repayment commitments of Rs468 crore in FY2026 and Rs461 crore in FY2027, but it plans to refinance part of this with longer-tenure loans to smoothen its repayment profile.
A core strength of the group is its strong promoter backing. The Lulu (India) is promoted by Yusuff Ali MA and Ashraf Ali MA, and benefits from the operational heft and financial flexibility of the global Lulu Group.
The rating agency notes that a substantial fixed deposit of Rs1,000 crore has been pledged by the promoter as security to lenders, against which the company has availed a Rs980 crore loan.
Operationally, Lulu’s retail footprint in India is robust. The group currently operates around ten entities including five large malls in Kochi, Trivandrum, Bengaluru, Hyderabad and Lucknow – all of which are situated in high-footfall micro-markets and enjoy occupancy levels of over 95 per cent for non-Group tenants.
Around 45–50 per cent of the leasable area in these malls is occupied by Lulu’s own formats – hypermarkets, fashion outlets, and Funtura-branded amusement zones. In addition, the company has expanded or in the process of expanding its standalone hypermarket presence in cities like Calicut, Kottayam, Thrissur, and Bengaluru.
Revenue could reach Rs5,500cr
On a consolidated basis (including Lulu India Shopping Mall Pvt Ltd imited), the group’s revenues grew from Rs3,243.6 crore in FY2023 to Rs4,386.2 crore in FY2024, and are estimated to reach Rs5,400–5,500 crore in FY2025.
The rating agency expects revenue to grow by 25–30 per cent annually in FY2026 and FY2027, backed by the ramp-up of new and existing assets.
Despite these positives, the agency flags several structural risks: elevated working capital requirements in the retail segment, slower ramp-up in newly opened malls, and exposure to refinancing risks from bullet repayments due between FY2026 and FY2028. The success of the upcoming hypermarkets and timely refinancing are seen as critical to improving the company’s debt protection metrics.
For now, the company appears confident of meeting its obligations through operational cash flow and refinancing. But as Lulu continues to scale up aggressively, the question lingers: Is it stretching itself too thin in India?
