Vishal Mega Mart IPO Analysis – 10 Important Details for Potential Investors
Vishal Mega Mart is set to launch its Initial Public Offering (IPO) of INR 8,000 crore, from 11 to 13 December 2024. As potential investors consider this opportunity, understanding the following key points from the Red Herring Prospectus (RHP) is crucial. Let’s delve into the Vishal Mega Mart IPO analysis.
Vishal Mega Mart IPO Analysis – IPO Structure
Vishal Mega Mart IPO is entirely an Offer For Sale (OFS) of INR 8,000 crore, meaning that it involves the sale of existing shares by the promoters rather than issuing new shares. Consequently, the company will not receive any funds from this IPO; all proceeds will go directly to the selling shareholders, specifically Samayat Services LLP, which currently holds a 96.55% stake in the company.
Vishal Mega Mart IPO Analysis – Important Dates
The IPO will be available for subscription from 11 to 13 December 2024. Bidding for anchor investors opens a day earlier on 10 December. The allotment of shares is expected to be finalized on 16 December, with listing of shares on the BSE and NSE is scheduled for 18 December.
Vishal Mega Mart IPO Analysis – Price Band and Lot Size
The price band for the IPO has been set between INR 74 to 78 per share, with a minimum lot size of 190 shares. This means that retail investors need to invest at least INR 14,820 to participate in this offering.
Vishal Mega Mart IPO Analysis – Market Position and Growth Potential
Vishal Mega Mart operates over 645 stores across India and caters primarily to middle and lower-middle-income consumers. The company has established itself as a significant player in India’s retail sector, particularly in organized retailing which is expected to grow significantly—projected to reach INR 104 – 112 lakh crore by 2028 at a CAGR of 9%.
Vishal Mega Mart IPO Analysis – Financial Performance
For the six-month period ending 30 September 2024, Vishal Mega Mart reported substantial revenue growth, with sales from its own brands contributing approximately 72.86% of total revenue. This segment has shown a robust CAGR of 27.72% from FY2022 to FY2024. This performance indicates strong brand loyalty and market demand.
Comparison with Listed Peers
Business Model and Overview
Vishal Mega Mart is a one-stop destination catering to middle and lower-middle-income consumers in India. The company offers a diverse range of merchandise through its brands and third-party brands, addressing both aspirational and everyday needs. Its product offerings span three key categories: apparel, general merchandise, and fast-moving consumer goods (FMCG).
Vishal Mega Mart follows an asset-light business model, leasing its stores and distribution centres rather than owning them outright. This strategy minimizes capital expenditure while allowing flexibility in operations. The products sold include both in-house brands and third-party merchandise across apparel, general merchandise, and FMCG categories.
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