DMart promoters to sell shares via OFS

  • The Damanis will offload up to a 2.28% stake for up to $426 million
  • The promoter stake sale is an extension of the QIP offering launched by the retailer on 5 Feb

Swaraj Singh Dhanjal
Updated13 Feb 2020, 09:19 PM IST
As of 31 Dec, DMart had 196 stores with a retail floor space of 7 million sq. ft across 72 cities.
As of 31 Dec, DMart had 196 stores with a retail floor space of 7 million sq. ft across 72 cities.

Avenue Supermarts Ltd, which runs the supermarket chain DMart, on Thursday said its promoters will sell up to a 2.28% stake through an offer for sale (OFS) that will fetch as much as 3,032.5 crore ($426 million).

Promoters Radhakishan Damani, Gopikishan Damani, Shrikantadevi Damani and Kirandevi Damani will offload a total of 14.8 million shares through the share sale, Avenue Supermarts said in a regulatory filing. The shares will be sold at a floor price of 2,049, a 19.5% discount to the closing price of 2,544.15 on Thursday.

The OFS will open on Friday for institutional investors, while retail investors will be able to subscribe on Monday.

Axis Capital and BofA Securities are advising DMart on the share sale.

Mint first reported on 6 February that DMart promoters are planning to sell shares through an OFS.

The promoter stake sale is an extension of the qualified institutional placement (QIP) offering launched by the retailer on 5 February, which saw DMart sell shares worth 4,098 crore to institutional investors.

Investors who bought shares in the QIP included Lone Cypress Ltd, Government of Singapore, Europacific Growth Fund and ICICI Prudential Bluechip Fund.

Collectively, the two share sales are aimed at reducing promoter stake to meet Securities and Exchange Board of India (Sebi) norms on minimum public shareholding, which mandate companies to reduce promoter shareholding to 75% within three years of listing.

For DMart, which went public in March 2017, that deadline expires next month.

Post the QIP, promoter stake in the company came down to around 77.28%, down from 79.73% as of 31 December.

The QIP while allowing Damani to pare his stake, also helped the retail chain raise growth capital to fund the expansion of its store network.

“Our company proposes to utilize the net proceeds to augment long-term resources for financing our future expansion plans, which include funding expenditure towards implementation of our strategy on expanding our store network and increasing the efficiency of our supply chain network, including warehousing facilities and related acquisition of land,” the company said in a prospectus for the QIP offering.

The funds will also be used for strategic investments or acquisitions, as well as to repay loans.

“We intend to further enhance our position in the retail supermarket business in Maharashtra, Gujarat, Telangana, Andhra Pradesh and Karnataka by increasing our market penetration and expanding our store network in these states. We also intend to strengthen our store network in Madhya Pradesh, Chhattisgarh, Tamil Nadu, Rajasthan, Punjab and NCR,” according to the prospectus.

As of 31 December, DMart had 196 stores with a retail floor space of 7 million sq. ft. across 72 cities and towns with Maharashtra contributing the biggest chunk of the portfolio at 74 stores, followed by Gujarat at 35 stores.

Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:13 Feb 2020, 09:19 PM IST
Business NewsCompaniesNewsDMart promoters to sell shares via OFS

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Tata Steel share price

    149.70
    07:18 PM | 1 NOV 2024
    1.05 (0.71%)

    Indian Oil Corporation share price

    145.00
    07:19 PM | 1 NOV 2024
    2.3 (1.61%)

    Tata Power share price

    445.20
    07:19 PM | 1 NOV 2024
    5.15 (1.17%)

    Bandhan Bank share price

    183.65
    07:10 PM | 1 NOV 2024
    1.4 (0.77%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    Rainbow Childrens Medicare share price

    1,545.00
    06:59 PM | 1 NOV 2024
    -67.25 (-4.17%)

    ICICI Securities share price

    833.45
    06:59 PM | 1 NOV 2024
    -32.85 (-3.79%)

    Vijaya Diagnostic Centre share price

    966.70
    06:59 PM | 1 NOV 2024
    -30.35 (-3.04%)

    Narayana Hrudayalaya share price

    1,235.60
    06:59 PM | 1 NOV 2024
    -36.75 (-2.89%)
    More from Top Losers

    Brigade Enterprises share price

    1,244.80
    07:19 PM | 1 NOV 2024
    71.75 (6.12%)

    PCBL share price

    432.15
    07:17 PM | 1 NOV 2024
    21.35 (5.2%)

    Piramal Pharma share price

    281.85
    07:17 PM | 1 NOV 2024
    13.45 (5.01%)

    Jubilant Pharmova share price

    1,273.00
    06:59 PM | 1 NOV 2024
    60.65 (5%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      80,415.000.00
      Chennai
      80,421.000.00
      Delhi
      80,573.000.00
      Kolkata
      80,425.000.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.92/L0.00
      Chennai
      100.80/L0.00
      Kolkata
      104.95/L0.00
      New Delhi
      94.77/L0.00

      Popular in Companies

        HomeMarketsloanPremiumMint Shorts