Kshitij Anand Moneycontrol.com
Avenue Supermarts, the operator of supermarket retail chain D-Mart on Tuesday, more than doubled investors’ wealth on debut itself as the stock listed with a hefty premium of more than 100 per cent from its issue price.
The stock listed at Rs 604.4 on the Bombay Stock Exchange, up 102 per cent over the issue price of Rs 299.
The stock is among the first to list with gains of over 100 per cent in the financial year 2017, followed by Quess Corp which listed at a premium of 57 per cent, Thyrocare Technologies rose 48 per cent recorded listing gains of nearly 50 per cent.
Investors earned huge returns on their money invested in the issue. One lot of 50 shares at issue price of Rs 299 cost Rs 14,950 for an investor. At listing price of Rs 610, the total value of investment jumped Rs 30,500.
The much talked about BSE Ltd IPO which got listed on the bourses last month recorded a 35 per cent premium while Advanced Enzyme Technologies posted 36 per cent listed at a premium of 36 per cent.
The euphoria among the analysts and the investor community was on a high ahead of the listing and why not? The firm is backed by value investor Radhakishan Damani who has been a role model of many analysts on D-Street.
He is one of the most prominent investors in India known for making sound & quality investment decisions. The company currently has 6 Directors, comprising three Executive Directors, one Non-Executive Director and two Independent Directors.
D-Mart, parent Avenue Supermarts hit D-Street earlier in the month to raise Rs 1,870 crore got subscribed a staggering 104.48 times at the end of the three-day bidding.
Avenue Supermart (ASL) which was incorporated in 2000 is one of the largest and most profitable F&G (Food & Groceries) retailers in India. The business model of ASL is based on the concept of offering value retailing to its customers.
The firm has posted consistent growth in its return on equity (ROE) at 23.4 per cent in FY16 despite owning real estate at most store locations which is a positive sign.
“The overall financial performance remained strong with revenue/ PAT registering a stellar CAGR of 40 percent/52 percent over FY12-16. The company has consistently improved its EBITDA margin from 6.2 percent in FY12 to 7.7 percent in FY16, reflecting its operational efficiency,” Geojit Financial Services said in a note.
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