Vishal Mega Mart, a leading supermarket chain in India, is geared with the launch of its initial public offering (IPO) on December 11. The company aims to raise Rs 8,000 crore through an offer for sale (OFS). The public subscription will close on December 13, with share allotments scheduled for December 16. Trading of shares will commence on December 18 on both the BSE and NSE exchanges.
The IPO price band has been set between Rs 74-78 per equity share. Retail investors can apply for a minimum lot of 190 shares, requiring an initial investment of Rs 14,820. For small non-institutional investors, the minimum investment is 14 lots (2,660 shares), amounting to Rs 2.07 lakh. Large non-institutional investors must apply for at least 68 lots (12,920 shares), with an investment of Rs 10.07 lakh.
As of September 30, Vishal Mega Mart operates 645 franchise outlets across 414 cities, utilizing over 11 million square feet of retail space. The company reported strong financial growth in FY24, with a 17.41% increase in revenue and a 43.78% rise in profit after tax. Its current market valuation stands at Rs 35,168.01 crore.
Founded in 2001, Vishal Mega Mart is a fashion-focused hypermarket chain. In 2018, Switzerland’s Partner Group and India’s Kedaara Capital acquired controlling stakes in the company. With its debt-free status, strong financial health, and extensive market presence, Vishal Mega Mart offers an attractive investment opportunity.
The IPO has garnered substantial interest in the grey market, where the current grey market premium (GMP) of Rs 24 suggests a potential listing premium of 31%. The GMP has shown growth, rising from Rs 17 over the weekend.
Vishal Mega Mart’s valuation is considered modest compared to competitors such as Avenue Supermarts (DMart), trading at a PE multiple of 92, and Trent, with a multiple of 137. Although Vishal has the lowest revenue among these peers, its operating margins of 13-14% surpass DMart’s 8-9%. In FY24, Vishal recorded a sales growth rate of 19.3%, outperforming DMart’s 16.4% but lagging behind Trent’s 47.2%. Vishal Mega Mart boasts relatively higher EBITDA margins and similar PAT margins when compared to its primary competitor, DMart.
With its established market position, strong operational scale, and focus on its target demographic, Vishal Mega Mart’s IPO is seen as a promising investment opportunity, despite its aggressive pricing.
