Ramachandran Ottapathu, one of Botswana’s richest businessmen, is facing a tough time in the equity market this year as the market value of his stake in Choppies Enterprises slumps by millions of dollars.
According to Billionaires.Africa, the market value of his stake in the Gaborone-based supermarket chain has declined by R72.76 million ($3.8 million) since the start of the year.
Choppies Enterprises is Botswana’s largest retail chain, with a centralized distribution network in South Africa, Zimbabwe, Zambia, and Kenya.
The supermarket chain distributes both well-known international food brands and private-label items.
As the co-founder of Choppies, Ramachandran Ottapathu owns a controlling 24.48-percent stake in the supermarket chain, totaling 316,353,058 ordinary shares. However, the recent sell-down in the shares of his company has led to a decline in the market value of his stake.
Since the start of the year, the market value of his stake in Choppies has declined R72.76 million ($3.8 million) from R287.88 million ($15.02 million) on January 1 to R215.12 million ($11.22 million).
The $3.8 million decline in the market value of his stake can be linked to the 25.2 percent slump in Choppies shares on the Johannesburg Stock Exchange from R0.91 ($0.0475) on Jan. 1 to R0.68 ($0.355) on May 12.
The decline in the market value of Ottapathu’s stake in Choppies reminds us of the risks associated with equity investments.
However, the supermarket chain hopes for a turnaround as it looks to strengthen its business, which could lead to increased revenue and growth opportunities.
Despite the decline in the market value of his stake, Choppies Enterprises has announced plans to take over control of Kamoso Africa, a leading manufacturing, sales, and retail group, to boost its valuation and return more value to shareholders.
Earlier this year, the supermarket chain announced that it is conducting a thorough evaluation of its plans to acquire a 76-percent stake in Kamoso Africa through one of its subsidiaries, Choppies Distribution Center (CDC).