Vishal Mega Mart weighing confidential filing of IPO papers; fourth after Tata Play, Oyo & Swiggy

The firm's draft papers are likely to be submitted to the regulator within the next 7-10 days

Leading fashion-led hypermarket chain Vishal Mega Mart, which is promoted by a consortium of Kedaara Capital and Partners Group, is planning to opt for the confidential pre- filing route with Sebi for its initial public offer ( IPO), three persons in the know told Moneycontrol on the condition of anonymity.

If the ongoing deliberations fructify into a confidential filing with the regulator, Vishal Mega Mart would be the fourth IPO bound firm to choose the mechanism after Tata Play, Oyo and Swiggy.

The firm's draft papers are likely to be submitted to the regulator within the next 7-10 days and depending on the offer for sale component, it could raise between $750 million to a $1 billion , one of the persons above added.

When contacted , Kedaara Capital and Partners Group declined to comment.

Introduced by Sebi as an alternate for main board issuers in November 2022, pre-filing, allows firms to keep their sensitive business details like financial metrics and risks under wraps, especially from rivals. On the other hand, in the standard format, the DRHP (draft red herring prospectus) becomes a public document post filing.

This gives issuers the comfort of confidentiality till they arrive at a final decision on the listing and if required, they can even pull out later depending on market conditions, without disclosing key information.

Additionally, under the pre-filing route, any change (increase or decrease) in fresh issue size after issuance of SEBI’s observation is permitted to the extent of 50 per cent as against 20 per cent in the standard mechanism.

In May 2018, Kedaara Capital and Partners Group acquired Vishal Mega Mart from TPG. The chain's listed peers included Avenue Supermarts ( DMart) and Shoppers Stop.

Kotak Mahindra Capital, ICICI Securities , Jefferies, JP Morgan and Morgan Stanley are the investment banks working on the Vishal Mega Mart IPO.

According to a March 4 report by India Ratings and Research, Vishal Mega Mart derives revenue from three major segments: i) better margin apparel, ii) general merchandise (GM), and iii) low-margin fast-moving consumer goods (FMCG), which offer high volumes and increased footfalls in its franchise stores.

The chain, which has a strong presence in the under-penetrated, organised value retail market, targets lower middle-class customers and has been among the top five retail companies in the country. As on December 2023, it had 589 franchised stores operating across over 350 cities with a store area of over 10.6 million square feet, the report added.

In March, leading Kolkata and Odisha-based value retail chain Bazaar Style Retail backed by Rekha Rakesh Jhunjhunwala filed for an IPO.