Vishal Mega Mart is the largest hypermarket chain in the country currently, and the news that they are now planning to raise funds with the initial public offering-IPO will attract many investors.
Guess what, they have just filed their Red Herring Prospectus (RHP) for the process. Based on the IPO, the company strives to raise a whopping amount of around Eight thousand crore rupees. This amount seems to be achievable since the company is growth-oriented as per various market gurus.
Interested in more information?
Yeah, let’s dig into how its current financial performance is, and cherish what all a possible investor can look at!
IPO Details
Key Dates
- IPO Opening Date: 11 Dec, 2024
- IPO Closing Date: 13 Dec, 2024
- Allotment Date: 16 Dec, 2024
- Listing Date: 18 Dec, 2024
Financial Aspects
- Issue Size: Approximately ₹8,000 crores
- Price Band: ₹74 to ₹78 per equity share
- Face Value: ₹10 per share
- Lot Size: Investors can apply for a minimum of 190 shares, with further applications in multiples of this lot size.
Allocation Quotas
The allocation of shares in the IPO is structured as follows:
- Qualified Institutional Buyers (QIBs): 50%
- Non-Institutional Investors (NIIs): 15%
- Retail Investors: 35%
This plan is to be used to widely distribute shares among various types of investors while giving retail investors 35% of the offering.
Company Overview
The origin of Vishal Mega Mart dates back to the year 2001. This is a head office-based company, with the biggest hypermarket in Gurugram. Additionally, it caters to millions of middle and lower-middle-class Indians. Commodity types in this store include garments, grocery, electronics, home appliances, and so on. It has opened as many as 645 stores across 414 cities in 28 states and two union territories till 30 September 2024. It rents the distribution centers and stores and purchases products from other companies. This is how the company was able to remain flexible and concentrate on growth in its market presence.
Financial Performance
The financial health of Vishal Mega Mart bears a healthy growth potential:
The company, in its latest financial statement, had disclosed earnings for the year ending March 2024 of approximately ₹8,945.13 crores as compared to ₹7,618.89 crores last year.
The net profit for FY24 stood at approximately ₹461.94 crores, as against ₹321.27 crores during FY23.
As of 30 September 2024, Vishal Mega Mart stated that it generated around ₹5,053.42 crores in sales and earned a net profit of ₹254.14 crores.
These numbers indicate how well Vishal Mega Mart is growing and how it can take more market share successfully. Many finance gurus are also inclined towards the fact that Vishal Mega Mart will achieve its goal.
Market Sentiment and Grey Market Premium
As the IPO approaches, people feel good about it. The grey market premium for Vishal Mega Mart is now around 15% for its equity shares. This premium indicates the desire of many investors who want to buy even before the subscription period begins, showing that investors believe in the company’s business plan and future success.
Strategic Importance of the IPO
The money generated from this IPO will play a big role. Since the IPO is an Offer for Sale (OFS), the proceeds will benefit the selling shareholders rather than being used for the company’s operations or expansion. Still, it is highly critical to the value of the company and its market presence. Vishal Mega Mart will become a public company helping make the brand more recognizable and increase customer footfalls while giving returns to the existing investors.
Conclusion
The IPO of Vishal Mega Mart is the biggest opportunity investors have in tapping into this growing retail sector of India. Along with a healthy track record of financial performance, the company has a strong foothold in several states. In the context of increasing consumer demand for affordable retail, it has much to gain.
As it is going to launch its IPO on 11 December, all eyes would be on its subscription and market acceptance. With a sound business model and excellent market sentiment as reflected in the grey market premium, Vishal Mega Mart can come out as a strong contender in the listed space once it hits the BSE and NSE on 18 December. In short:
- IPO Opening Date: December 11; Closing Date: December 13.
- Issue Size: Approximately ₹8,000 crores; Price Band: ₹74 to ₹78 per share.
- Financial Performance: Revenue growth from ₹7,618.89 crores (FY23) to ₹8,945.13 crores (FY24).
- Grey Market Premium: Currently around 15%, indicating strong investor interest.
Investors should keep an eye on this IPO as it unfolds in the coming weeks, as there is much to explore. The winds seem to be flowing on the positive side!