Upcoming IPO: Patel Retail gets SEBI’s nod to raise funds through issue of 90.18 lakh fresh shares

Upcoming IPO: Supermarket chain Patel Retail has received the capital markets regulator, Securities and Exchange Board of India's (Sebi), approval to float an initial public offering (IPO).

The IPO includes a fresh issue of up to 90.18 lakh shares at a face value of ₹10 per equity share and an offer for sale of 10.02 lakh shares by the company's promoters.

Patel Retail promoters' details

Among the shares on offer, Dhanji Raghavji Patel will sell 7.68 lakh shares, while Bechar Raghavji Patel will offload 2.34 lakh shares. A portion of the offering is reserved for employees.

In its April 3, 2024, IPO filing, Patel Retail also mentioned the possibility of a pre-IPO placement of up to 5 lakh shares, which would reduce the size of the fresh issue if completed. The offer is structured through a book-building process, with 50% allocated to qualified institutional buyers, 15% to non-institutional investors, and 35% to retail investors.

How will Patel Retail use the funds?

The company plans to use the funds raised from the fresh issue to repay certain borrowings, fund working capital requirements, and for general corporate purposes. Specifically, ₹60 crore will go towards debt repayment, while ₹115 crore will be allocated for working capital.

Founded in 2008, Patel Retail launched its first store in Ambernath, Maharashtra, and has since expanded across the suburban regions of Thane and Raigad. The company operates 31 stores, covering a total retail area of approximately 1,26,000 square feet. Patel Retail has diversified its product offerings into 38 categories, including food, FMCG, general merchandise, and apparel.

The company has also introduced private-label products such as "Patel Fresh" pulses and "Indian Chaska" spices to improve margins and strengthen its brand. These products are processed and packaged at the company's facility in Ambernath, Maharashtra.

Patel Retail has grown into a significant player in the value retail sector, with ambitions to expand its store network within the Mumbai Metropolitan Region and other suburban areas. The company also operates two exclusive ready-made garment outlets under the brand "R Choice" and engages in export trading of agricultural commodities and other products.

In fiscal year 2023, Patel Retail's revenue from operations rose 32.94% to ₹1,018.55 crore, with profit after tax increasing by 44.06% to ₹16.38 crore.