Gurugram-based Vishal Mega Mart has filed a draft red herring prospectus (DRHP) with capital markets regulator SEBI to raise Rs 8,000 crore in an IPO (initial public offering). The proposed IPO will entirely be an offer-for-sale of shares by promoter Samayat Services LLP, and no fresh issue of equity shares.
Promoters own 98.77 percent stake in the company, including Samayat Services LLP's 96.55 percent shareholding.
Vishal Mega Mart, which offers products in apparel, general merchandise and fast-moving consumer goods categories through its 626 stores and Vishal Mega Mart mobile application and website, competes with Mukesh Ambani's Reliance Retail, Tata Group's Trent and grocery retailer Avenue Supermarts.
It is among the two leading offline-first diversified retailers in India in terms of same-store sales growth.
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The entire issue proceeds will go to the promoter. Thus, the main objective of the Vishal Mega Mart IPO is to list equity shares on the stock exchanges and carry out the Rs 8,000-crore offer-for-sale.
The financial performance of the retailer remained strong in the past years, with consolidated net profit for the year ended March 2024 growing sharply by 43.8 percent to Rs 461.9 crore with revenue increasing by 17.5 percent to Rs 8,911.9 crore compared to previous year.
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EBITDA (earnings before interest, tax, depreciation and amortisation) grew by 22.3 percent year-on-year to Rs 1,248.6 crore during the fiscal 2024, with margin expanding by 50 bps to 14 percent. In fact the margin improved in FY24 as in FY23, it was down by 90 bps from 14.4 percent in FY22.
Net profit for the three-month period ended June 2024 stood at Rs 150.1 crore on revenue of Rs 2,596.3 crore.
India's retail market is expected to grow at 9 percent CAGR to Rs 104-112 lakh crore in 2028, from Rs 68-72 lakh crore in 2023. Further, apparel, staples & FMCG, and general merchandise together contributed 50 percent of the overall retail market as of 2023 and are anticipated to continue doing so till 2028.
Kotak Mahindra Capital Company, ICICI Securities, Intensive Fiscal Services, Jefferies India, JP Morgan India, and Morgan Stanley India Company have been appointed as the book running lead managers to the issue.
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