Vishal Mega Mart IPO: Everything you need to know, Date, Price, Lot Size

The Indian supermarket chain Vishal Mega Mart is going to make its debut in the stock market with the much-awaited Initial Public Offering (IPO). Being the large supermarket chain in the country, the company wants to raise ₹8,000 crore through its IPO. Let's go through some of the salient points, financial high points, and what has made this IPO an attractor among investors.

Key Highlights of Vishal Mega Mart IPO

The Vishal Mega Mart IPO opens for public subscription from 11 December 2024 to 13 December 2024. And one day prior to it, on 10th of December 2024, is going to be the commencement day for anchor investors.

The IPO has been priced at a band of ₹74-78 per share so that it will be within the reach of a huge section of investors. Investors will have to invest a minimum of ₹14,820, with a lot size of 190 shares at the upper price band.

Offer for Sale (OFS) Structure

This is a pure OFS issue wherein the promoter-selling shareholder, Samayat Services LLP, will be selling a part of their holding. Thus, Vishal Mega Mart will not get any proceeds from this IPO.

The total issue size is about 102.5 crore shares, which will be allocated as follows:

Vishal Megha Mart IPO Structure

Financial Performance

Vishal Mega Mart has given tremendous growth over the past few years, making itself one of the leading entities in the retail industry.

Revenue Growth: The Company's revenue grew by 17.48% YoY at ₹8,911.94 crore in FY24 from ₹7,586 crore in FY23

PAT: PAT increased by 44% YoY ₹461.93 crore in FY24 from ₹321.27 crore in FY23.

Operating Margins: Improved to 14% in FY24 against 13.45% in FY23.

These financials reflect the excellent working of operational efficiency and market presence for Vishal Mega Mart.

Business Overview of Vishal Megha Mart

Vishal Mega Mart operates 645 stores across 414 cities, including Tier 1, Tier 2 and smaller towns, in the 28 states and 2 union territories. Three main categories of product portfolios are offered by the company below:

>Apparel

>General Merchandise

>Fast Moving Consumer Goods (FMCG)

The company has also developed a portfolio of 19 private brands, of which six have achieved sales of over ₹5,000 million in FY24. This strategy to offer in-house brands has helped the company balance quality and affordability, making it a very preferred choice for Indian consumers.

Growth Potential in the Retail Market

The Indian retail industry is likely to grow at a high rate. The total addressable market for aspirational retail would be growing from ₹68-72 trillion in 2023 to ₹104-112 trillion by 2028, with a CAGR of 9%.

Key reasons driving this growth include,

1. Increased urbanization.
2. Increased interest in organized retail.
3. Growth in consumer expectations concerning quality and variety of offerings.

Vishal Mega Mart is set to gain from these trends in a big way because it has a huge footprint and serves its consumers.

Strengths and Weaknesses

Strength

1. Pan-India Presence: Having a strong network in Tier 1 and Tier 2 cities and beyond.
2. Diversified Product Portfolio: Combining private and national brands catering to diverse consumer needs.
3. Efficient Operations: Technology-driven supply chain and cost management.
4. Experienced Leadership: Management team with over 21 years of industry experience.

Risks

1. High Competition: Highly intense competition from players like D-Mart and Trent.
2. Economic Decline: Any decrease in spending by consumers, including that in smaller cities could influence revenue growth.

Is the Vishal Mega Mart IPO a Good Investment Option?

Investment in the IPO of Vishal Mega Mart does not only provide an option for investment in India's burgeoning retail sector but can also be a good play since it has been showing consist financial growth, market growth and has a solid and efficient operational base.

Frequently Asked Questions (FAQs)

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