Shares of Vishal Mega Mart Ltd., a supermarket chain operator in India, debuted at ₹104 (£0.96) per share, representing a 33.3% premium over its IPO price of ₹78.
With the listing, the market capitalisation of the retail giant reached close to ₹50,000 crore (around £4.6 billion).
The company’s ₹8,000 crore initial public offering (IPO) was priced between ₹74 and ₹78 per share.
Vishal Mega Mart IPO details
The IPO saw strong demand, with total bids surpassing ₹1.6 lakh crore during the three-day bidding period. Qualified Institutional Buyers (QIBs) led the demand, subscribing 80.75 times their allocated shares, while the portion reserved for non-institutional investors (NIIs) was subscribed 14.24 times.
The retail investor segment was subscribed 2.31 times.
The entire issue was an Offer for Sale (OFS) entirely by the promoter entity, Samayat Services LLP, which is backed by Kedara Capital.
This means that the company did not receive any proceeds from the IPO, as there was no immediate need for funds.
Ahead of the IPO, the company raised a total of ₹2,400 crore from anchor investors such as SBI Mutual Fund, Government of Singapore, Nomura Funds Ireland Public Ltd, Axis Mutual Fund, HDFC Mutual Fund, and ICICI Prudential Mutual Fund.
What worked for Vishal Mega Mart IPO
Analysts were optimistic about the company’s market debut, with the grey market premium (GMP) rising by 25% ahead of its listing, reflecting strong investor interest.
Analysts at domestic brokerage firms Anand Rathi, Hem Securities and SBI Securities had a subscribe rating on the Vishal Mega Mart IPO.
At the upper price band, Vishal Mega Mart was being valued at a price-to-earnings (P/E) ratio of 67.83x, with an EV/EBITDA multiple of 28.1x.
The company has a return on net worth (RoNW) of 8.18%, analysts at Anand Rathi said.
“We believe that the IPO is fairly priced and recommend a Subscribe-Long term rating to the IPO,” the analysts added.
The stock hit an intraday high of ₹111.19.
The company’s financial performance also reinforced this positive sentiment, with its revenue growing at a compound annual growth rate (CAGR) of 26.3%, reaching ₹8,912 crore in FY24, up from ₹5,589 crore in FY22.
Its EBITDA increased to ₹1,249 crore, and net profit stood at ₹462 crore in FY24.
Vishal Mega Mart operates a network of 645 stores across India, primarily targeting middle and lower-middle-class consumers.
Its strategic focus on smaller cities, where quick-commerce is still developing, has allowed it to carve out a strong position in India’s ₹600 billion grocery and supermarket industry, providing some insulation from challenges faced by its larger competitors.
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