Vishal Mega Mart Limited IPO: ₹8,000 Crore Issue Opens Dec 11
Vishal Mega Mart Limited, one of India’s largest hypermarket chains catering to middle and lower-middle-income households, is set to launch its much-anticipated ₹8,000 crore Initial Public Offering (IPO) from 11th December to 13th December 2024. This IPO offers a chance to invest in a company that has become a household name for affordable and quality shopping across India.
Here are 10 key things to know about the Vishal Mega Mart Limited IPO:
What makes Vishal Mega Mart a promising opportunity?
Vishal Mega Mart operates 645 stores across 414 cities in India and offers a wide range of products spanning apparel, groceries, electronics, and home essentials. The company’s asset-light business model and robust supply chain ensure cost efficiency while providing quality products at affordable prices.
- With a revenue CAGR of 26.28% over FY22-FY24 and stable EBITDA margins of 13–14%, the company is poised to capture growth in the aspirational retail market, expected to reach ₹104–112 trillion by 2028.
- A strong focus on affordability and convenience has helped build a loyal customer base, supported by millions of registered users in its loyalty program.
IPO dates, price band, and issue size
Here are the key details of the Vishal Mega Mart Limited IPO:
- IPO dates: December 11th – 13th, 2024
- Price band: ₹74–₹78 per share
- Total issue size: ₹8,000 crore (Offer for Sale)
- Face value: ₹10 per share
- Lot size: 190 shares
- Listing exchanges: BSE, NSE
- Promoters: Samayat Services LLP and Kedaara Capital Fund II LLP.
What Is the minimum investment for Vishal Mega Mart IPO?
The minimum investment required to apply for Vishal Mega Mart IPO is ₹14,060, and the lot size for this IPO is 190 shares. However, we recommend applying for the IPO at the upper price band to increase your chances of getting the IPO – which is ₹14,820 (190 shares at the lower price band of ₹74).
What Does the Company Do?
Incorporated in 2001, Vishal Mega Mart is a leading hypermarket chain that targets middle and lower-middle-income households. The company:
- Sells a mix of its brands and third-party brands across categories like apparel, general merchandise, and FMCG.
- 645 stores operate as of September 30, 2024, in 28 states and two union territories.
- Follows an asset-light model, leasing its distribution centers and stores while sourcing products from third-party vendors.
What Are the Objectives of the IPO?
The IPO proceeds will primarily be used to:
- List the equity shares on BSE and NSE to enhance brand visibility.
- Facilitate the Offer for Sale (OFS) of up to 102.56 Cr shares, with proceeds going to existing shareholders.
How Much Is Reserved for Retail and Other Investors?
The allocation of shares is expected as follows:
- Qualified Institutional Buyers (QIBs): Up to 50%
- Non-Institutional Investors (NIIs): At least 15%
- Retail Investors: At least 35%
What Are the Strengths and Risks of Vishal Mega Mart IPO?
Strengths
- Pan-India Reach: 645 stores across 414 cities ensure deep market penetration.
- Affordable offerings: Serves a growing segment of aspirational consumers with a variety of products.
- Technological advantage: Uses advanced analytics and inventory management systems.
- Robust financial growth: Demonstrates consistent revenue and EBITDA growth.
Risks
- Vendor dependence: Relies entirely on third-party vendors for product manufacturing.
- Legal challenges: Under investigation by the Enforcement Directorate for compliance issues.
- Rapid market changes: Faces risks from evolving consumer preferences and technological advancements.
- Cybersecurity concerns: Increasing reliance on digital platforms exposes vulnerabilities.
What Is the financial performance of Vishal Mega Mart?
Here’s a snapshot of the company’s financial performance:
| Period Ended | 30 Sep 2024 | 31 Mar 2024 | 31 Mar 2023 | 31 Mar 2022 |
| Assets (₹ Cr) | 9,552 | 8,506 | 8,289 | 8,218 |
| Revenue (₹ Cr) | 5,032 | 8,912 | 7,586 | 5,589 |
| Profit After Tax (₹ Cr) | 254.1 | 461.9 | 321.3 | 202.8 |
When are the allotment and listing dates?
- Allotment date: December 16, 2024
- Shares credited to Demat accounts: December 17, 2024
- Listing date: December 18, 2024
Should you invest in Vishal Mega Mart IPO?
Vishal Mega Mart offers a compelling investment case with its large market share, strong financials, and focus on affordability and convenience. However, risks like vendor dependence, regulatory scrutiny, and market competition should not be overlooked.
With India’s aspirational retail market projected to grow significantly, Vishal Mega Mart is well-positioned to capitalize on this opportunity. Assess your risk appetite and long-term goals before making an investment decision.
