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PremiumVishal Mega Mart IPO Day 2 Updates: Vishal Mega Mart IPO, a hypermarket chain backed by Kedaara Capital, launched its initial public offering (IPO) on Wednesday, December 11. The public issue enters second day of bidding process today, December 12, and will conclude on Friday, December 13. The company secured ₹2,400 crore from various global and domestic institutional investors through its anchor book on December 10. On the first bidding day, Vishal Mega Mart IPO subscription status was 51%, as per BSE data. Despite the IPO attempting to navigate a vibrant market, its allocation for non-institutional investors (NIIs) was completely subscribed.
Vishal Mega Mart IPO price band has been set between ₹74 and ₹78 per equity share. The IPO is solely composed of an offer for sale (OFS) worth ₹8,000 crore from Samayat Services LLP, the promoter that possesses a 96.46 percent ownership in Vishal Mega Mart. At the upper price band of ₹78, the company is expected to have a market capitalization of around ₹36,120 crore.
Founded in 2018, Vishal Mega Mart operates as a hypermarket chain that provides a wide range of products such as clothing, food items, electronics, and household necessities.
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Vishal Mega Mart IPO Day 2 Live: As of December 12, the grey market premium for the Vishal Mega Mart public issue fell to ₹17 per share.
With the upper price band at ₹78 per share, the IPO is estimated to hit Dalal Street at ₹95 per share, a premium of 21.79%, according to Investorgain.com.
Grey market premium (GMP) is an indicator of the investors' willingness to pay more for a public issue. The GMP earlier fell down to ₹18 per share from ₹21 per share the previous day. After the bidding rounds, the GMP fell Re 1 to ₹17 per share.
Vishal Mega Mart IPO Day 2 Live: The Vishal Mega Mart public issue received 1.54x subscription on the second day of public bidding. Investors subscribed for 1,16,61,04,860 shares, compared to the 75,67,56,757 shares on offer.
The NII segment led the bidding on the second day, subscribing 3.84 times, followed by the retail investors at 1.16 times. The Qualified Institutional Buyers (QIBs) segment received 48% subscription of the total shares on offer, at the end of Day 2.
Vishal Mega Mart IPO Day 2 Live: The Vishal Mega Mart IPO has been subscribed 1.51x on the second day, as of 4:24 p.m. according to the data released by BSE.
The NII segment is leading the bidding round with 3.73x subscription.
(The data release is lagging behind in time at the end of the exchange)
Vishal Mega Mart IPO Day 2 Live: The Grey market premium (GMP) for the Vishal Mega Mart IPO fell to ₹18 per share on the second day of public subscription.
With the upper price band at ₹78, the shares are expected to be listed at ₹96, a premium of 23.08%, according to data collected from Investorgain.com.
Grey market premium (GMP) is an indicator of investors' willingness to pay more for a public issue. The GMP for the IPO was at ₹21 per share on Wednesday, December 11.
Vishal Mega Mart IPO Day 2 Live: The Vishal Mega Mart IPO has been subscribed 1.37x on the second day, as of 3:48 p.m. according to the data released by BSE.
(The data release is lagging behind in time at the end of the exchange)
Vishal Mega Mart IPO Day 2 Live: The Vishal Mega Mart IPO has been subscribed 1.31x so far, as of 3:24 p.m. on the second day of bidding.
Investors have subscribed for 99,25,73,300 shares, compared to the 75,67,56,757 shares on offer.
The NII segment is witnessing heavy booking, currently at 3.10x of the shares on offer.
Vishal Mega Mart IPO Day 2 Live: The Non-Institutional Investors (NIIs) have subscribed to the Vishal Mega Mart IPO 2.90x so far, as of 3:15 p.m., according to the BSE data release.
Retail investors are following the NII cue, coming in at 1.04x subscription, and the Qualified Institutional Buyers (QIBs) have subscribed 39% of their available shares on Day 2.
Vishal Mega Mart IPO Day 2 Live: The Vishal Mega Mart initial public offering (IPO) has been booked 1.21 times the shares available, so far on the second day.
The investors have subscribed for 91,22,36,930 shares compared to the 75,67,56,757 shares on offer, on Thursday.
At the upper priceband of 78, VMM is valued at a FY24 PE multiple of 69x on post-issue capital. The company has a strategic growth plan to expanditsstore network by adding 1,400 new stores over the next 14-15years(900 stores in tier 2 and tier 3 cities and 450 stores in tier 1 cities). This expansion is expected to focus on southern India, where the company currently has lower market penetration. Given this ambitious growth strategy, we recommend subscribing to the issue for long-term growth potential.
The company targets the middle and lower middle-income India. The number of middle income households in India increased to ~ 225 million(~945 million individuals) in CY23 from ~ 201 million in CY18. The total addressable market for aspirational retail in India is ₹68-72 trillion (US$ 820-870 billion) for CY 2023, and is expected to grow at a CAGR of 9% to ₹104-112 trillion (US$ 1,250- 1,350 billion) by CY 2028
The initial public offer of Vishal Mega Mart IPO has been subscribed 1.09 times on the second day of subscription today, at 14:00 IST, as per BSE data.
The initial share sale received bid for 82,80,07,270 shares against 75,67,56,757 shares on offer, according to BSE.
The portion for retail investors received 92% subscription while the quota for non-institutional investors got subscribed 2.59 times. The qualified institutional buyers (QIBs) part is booked 27%.
Vishal Mega Mart has a significant potential for further expansion of pan India store network. Also, with proven track record of the financials and a strong focus on technology-driven operations and potential growth of retail sector, the company is well positioned to benefit from the growing demand of affordable daily use products. Looking at all the factors, risks, opportunities and valuation, investors can invest in the issue with Long term horizon.
1. Focused on serving a large and fast-growing section of the Indian population
2. Consumer-centric approach resulting in loyal consumer base
3. Diverse and Growing Portfolio of Own Brands
4. Pan-India Presence
5. Technology Enabled, Systems Driven Operations
The initial public offer of Vishal Mega Mart IPO has been subscribed 88% on the secondday of subscription today, at 12:39 IST, as per BSE data.
The initial share sale received bid for 66,49,25,520 shares against 75,67,56,757 shares on offer, according to BSE.
The portion for retail investors received 79% subscription while the quota for non-institutional investors got subscribed 2.19 times. The qualified institutional buyers (QIBs) part is booked 4%.
The company's revenue/EBITDA/PAT grew robustly at 26%/25%/51% CAGR over FY22-24. EBITDA margin is higher at ~14% vs ~8% for D-Mart, largely on account of higher share of apparels. It further expect margin to improve as operating leverage sets in. Its avg. payback period/store for new stores during FY23 was 19 months, the shortest among leading offline-first diversified retailers in India, mainly because all its stores are operated on a leasehold basis.
Vishal Mega Mart IPO has reserved not more than 50% of the shares in the public issue for qualified institutional buyers (QIB), not less than 15% for non-institutional Institutional Investors (NII), and not less than 35% of the offer is reserved for retail investors.
Vishal Mega Mart, the 2nd largest offline-first diversified retailer, is well placed to capitalize on the growing middle class population in India. Extensive expansion plans along with focus on diversification, high margin products and operating leverage is likely to bolster revenue growth. At ₹78, issue is priced at 76x FY24 P/E and looks reasonable compared to other listed peers. We recommend investors to ‘Subscribe’ to the issue.
The initial public offer of Vishal Mega Mart IPO has been subscribed 71% on the second day of subscription today, at 11:12 IST, as per BSE data.
The initial share sale received bid for 53,37,78,210 shares against 75,67,56,757 shares on offer, according to BSE.
The portion for retail investors received 69% subscription while the quota for non-institutional investors got subscribed 1.64 times. The qualified institutional buyers (QIBs) part is booked 3%.
On average, each store requires a capital expenditure of ₹20 million, covers about 18,000 square feet of retail space, and achieves payback within 19 months.
The firm employs a hub-and-spoke distribution model to effectively source products and oversee store inventory. In the clothing sector, this approach enables rapid restocking of stores in response to current fashion trends and sales information.
As of September 30, 2024, the company runs one main distribution center, one additional center, and 17 regional hubs, all strategically placed near significant demand locations. The primary distribution centers are managed by the company, while the regional hubs are operated by the promoter, Samayat Services LLP, through third-party agreements.
India's retail market is increasingly becoming more organised and is projected to grow at a CAGR of 20% between CY2023 and CY2028.
The adoption of omnichannel strategies in India is accelerating, driven by their ability to strengthen consumer engagement and elevate brand perception.
The initial public offer of Vishal Mega Mart IPO has been subscribed 58% on the second day of subscription today, at 10:09 IST, as per BSE data.
The initial share sale received bid for 43,67,31,150 shares against 75,67,56,757 shares on offer, according to BSE.
The portion for retail investors received 59% subscription while the quota for non-institutional investors got subscribed 1.27 times. The qualified institutional buyers (QIBs) part is booked 3%.
The projected valuation metrics, including a PE of 76x and EV/EBITDA of 29x, appear attractive, reflecting its strong growth trajectory and market positioning. Vishal Mega Mart presents an attractive opportunity for long-term investors seeking to benefit from India's expanding organized retail market. Hence, we assign a “SUBSCRIBE" rating to the IPO.
• Apparel
• General Merchandise(GM)
• Fast-Moving Consumer Goods (FMCG)
During FY 2024, 19 of the company’s own brands recorded sales exceeding ₹ 100 Cr each, with 6 of the company’s own brands recording sales exceeding ₹ 500 Cr each. The company’s revenue from operations from sales of own brands grew at a CAGR of 27.72% between FY2022-2024.
Vishal Mega Mart initiated a pilot program in the quick commerce sector last year. The platform functions within an 8-10-kilometre range from each store, enabling users to access the inventory of their nearest outlet via the app.
Currently operational in 390 cities throughout India, the pilot program has demonstrated positive outcomes, increasing optimism for further expansion, stated Gunender Kapur, MD & CEO of Vishal Mega Mart in an interview with CNBC-TV18.
Vishal Mega Mart IPO GMP today is +21. This indicates Vishal Mega Mart share price was trading at a premium of ₹21 in the grey market, according to investorgain.com.
Considering the upper end of the IPO price band and the current premium in the grey market, the estimated listing price of Vishal Mega Mart share price is indicated at ₹99 apiece, which is 26.92% higher than the IPO price of ₹78.
Based on the grey market trends from the last eight sessions, today’s IPO GMP is on the rise and suggests a robust listing. The lowest GMP recorded is ₹13, whereas the highest reaches ₹25, as noted by experts at investorgain.com.
'Grey market premium' indicates investors' readiness to pay more than the issue price.
Vishal Mega Mart IPO Live: Vishal Mega Mart IPO received bids for 38,63,32,890 shares against 75,67,56,757 shares on offer on the first day of the bidding process, according to NSE data. The portion for retail investors received 53% subscription while the quota for non-institutional investors got subscribed 1.11 times. The qualified institutional buyers (QIBs) part is booked 3%.
Vishal Mega Mart IPO Day 2 Live: Vishal Mega Mart IPO has entered the second day of its bidding process today, December 12. The public issue got subscribed 51% on the first day as it received bids for 38.58 crore equity shares as against 75.67 crore shares on the offer. The bidding will now commence at 10:00 AM today.
The initial public offer of Vishal Mega Mart IPO has been subscribed 51% on the first day of subscription today, at 17:00 IST, as per BSE data.
The initial share sale received bid for 38,63,32,890 shares against 75,67,56,757 shares on offer, according to BSE.
The portion for retail investors received 53% subscription while the quota for non-institutional investors got subscribed 1.11 times. The qualified institutional buyers (QIBs) part is booked 3%.
At the higher price range, VMM is demanding a EV/Sales multiple of 3.8x, which seems to be fully priced. However, the company has seen a steady growth in its top and bottom line because of the increase in number of stores and also because of its own brand sales which positively impacts the margins. Over the years, the company has shown a good hold in its inventory and working capital management, which gives a sustainable outlook for long term. Thus, we recommend an “Subscribe For Long Term" rating for this issue.
The initial public offer of Vishal Mega Mart IPO has been subscribed 42% on the first day of subscription today, at 16:00 IST, as per BSE data.
The initial share sale received bid for 31,96,77,660 shares against 75,67,56,757 shares on offer, according to BSE.
The portion for retail investors received 49% subscription while the quota for non-institutional investors got subscribed 83%. The qualified institutional buyers (QIBs) part is yet to be booked.
"We believe Vishal Mega Mart Ltd IPO brings investors an opportunity to invest in a prominent retailer catering to India's growing middle- and lower-middle-income demographics. We think the company’s extensive portfolio of affordable, quality and branded products positions it well in the rapidly expanding aspirational retail market, projected to grow at a 9% CAGR to Rs.104-112 trillion by 2028.
Vishal Mega Mart is poised to capitalize on India’s expanding urbanization and retail trends. The steady increase in store count across key geographies further supports the scalability of its business model. Hence, looking at all attributes we recommend investors to “SUBSCRIBE" the Vishal Mega Mart Ltd IPO for long perspective," said Rajan Shinde, Research Analyst, Mehta Equities Ltd.
Vishal Mega Mart acquired Airplaza Retail Holdings Pvt. Ltd (ARHPL) on a fully diluted basis from Kedaara Capital Fund II LLP and its nominee Aman Gandhi, for a total consideration of ₹ 74.76 Cr. While the company has acquired ARHPL, the acquiree i.e Kedaara Capital Fund II LLP holds controlling interest in the company’s other Promoter, Samayat Services LLP through Rishay Services LLP and Rishanth Services LLP.
The initial public offer of Vishal Mega Mart IPO has been subscribed 33% on the first day of subscription today, at 14:42 IST, as per BSE data.
The initial share sale received bid for 24,86,53,950 shares against 75,67,56,757 shares on offer, according to BSE.
The portion for retail investors received 41% subscription while the quota for non-institutional investors got subscribed 58%. The qualified institutional buyers (QIBs) part is yet to be booked.
The company's promoters include Samayat Services LLP and Kedaara Capital Fund II LLP. Samayat Services is involved in providing warehousing and transportation services, while Kedaara Capital Fund II LLP focuses on making investments aimed at enhancing operational efficiency.
The company’s loyalty program was awarded the “Best Loyalty Programme of the Year Food Retail and Non-Food Retail" at the International Loyalty Awards 2023. The Company has 133.82 million customers registered under the loyalty program as at September 30, 2024.
Vishal’s revenue grew from ₹5,588cr in FY22 to ₹8,911cr in FY24 with a CAGR of 26.3%, primarily due to an increase in revenue from existing and new stores. The number of stores has increased to 611 at a CAGR of 10% during the same period.
The company’s EBITDA grew from ₹803cr in FY22 to ₹1,248cr in FY24 with a CAGR of 24.7%. PAT increased to ₹462cr, reflecting a CAGR of 51.2% over the FY22-24 period.
The initial public offer of Vishal Mega Mart IPO has been subscribed 22% on the first day of subscription today, at 12:57 IST, as per BSE data.
The initial share sale received bid for 16,78,61,770 shares against 75,67,56,757 shares on offer, according to BSE.
The portion for retail investors received 30% subscription while the quota for non-institutional investors got subscribed 34%. The qualified institutional buyers (QIBs) part is yet to be booked.
At the upper price band of Rs.78, VMML is trading at a P/E of 69x on FY25 earnings (annualized), which appears fairly priced compared to its peers and factoring its high growth. Considering positive industry growth opportunities, expected rise in demand, healthy store additions, and presence in the online channel, we assign a “Subscribe" rating on a medium- to long-term basis.
Kotak Mahindra Capital Company Limited, ICICI Securities Limited, Intensive Fiscal Services Private Limited, Jefferies India Private Limited, J.P. Morgan India Private Limited, and Morgan Stanley India Company Pvt Ltd serve as the book running lead managers for the Vishal Mega Mart IPO, with Kfin Technologies Limited acting as the registrar for the offering.
• The IPO offers an attractive valuation at 76x FY24 PE, making it relatively affordable compared to industry peers and providing a promising opportunity for retail investors. The valuation is further supported by a robust 50% CAGR growth in EPS, which enhances its appeal.
• Investors interested in the retail sector are encouraged to subscribe to this IPO. Allottees can consider holding the shares for long-term gains.
The initial public offer of Vishal Mega Mart IPO has been subscribed 13% on the first day of subscription today, at 11:30 IST, as per BSE data.
The initial share sale received bid for 9,91,10,840 shares against 75,67,56,757 shares on offer, according to BSE.
The portion for retail investors received 19% subscription while the quota for non-institutional investors got subscribed 18%. The qualified institutional buyers (QIBs) part is yet to be booked.
Vishal Mega Mart has set up a pan-India omnichannel network that includes (i) an online channel via the Vishal Mega Mart website and mobile application, and (ii) an offline channel via the network of physical stores. 645 stores spread throughout 414 Indian cities make up the offline channel, while e-commerce platforms, such as the business's website and mobile application, make up the internet channel. Customers can place online orders for delivery or in-store pickup, as well as check product availability at the closest stores, using the website and smartphone application.
At a compound annual growth rate (CAGR) of 9%, the aspirational retail market in India is projected to reach ₹68–72 trillion (US$ 820–870 billion) by 2023 and ₹104–112 trillion (US$ 1,250–1,350 billion) by 2028. According to the Redseer Report, there has been a steady trend in the aspirational retail market toward organized retail, mostly because of rising standards for quality, a greater selection, better prices, particularly for fast-moving consumer goods, denser cities, and plenty of room for organized retailers.
