Vishal Mega Mart Listing News: The shares of supermart company Vishal Mega Mart have made a spectacular entry in the stock market today on 18 December 2024. The company’s shares were listed on BSE at Rs 110, while the IPO price was Rs 78. In this sense, the stock has given 41 percent return to investors on its listing. The company’s IPO had received a good response from investors. There were indications of strong listing in the gray market. This IPO was open for public subscription from 11 to 13 December 2024. The size of the IPO was around Rs 8000 crore. The question is whether to sell the shares after earning profit or stay in it.
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Vishal Mega Mart IPO: received bumper response from investors
Vishal Mega Mart’s IPO has been subscribed 28.75 times overall. In the IPO, 35 percent share was reserved for retail investors and it was filled 2.43 times overall. 15 percent of the IPO was reserved for non-institutional investors (NII) and it was subscribed 15.01 times overall. Whereas 50 percent of the share was reserved for Qualified Institutional Buyers (QIB) and it was filled 85.11 times overall.
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Vishal Mega Mart: What is the strength of the company?
• Providing service to a large and growing section of the Indian population.
• Due to consumer-centric approach, a large and loyal consumer base has been created
• Diverse and rapidly growing portfolio of own brands across product categories
• Pan India presence with a track record of consistent store growth
• Technology enabled and system driven operations
• Professional and experienced management team
• Track record of delivering revenue, profit growth and capital efficiency
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Vishal Mega Mart: Risks and concerns
• General slowdown in global economic activity
• Dependence on third party vendors to manufacture products sold in your stores
• Changing consumer preferences.
• Revenue concentration from stores in Uttar Pradesh, Karnataka and Assam.
• Risks associated with leasing real estate for its operations.
• Increasing competition in the sector
(Source: Brokerage house Choice Broking)
How is the company’s outlook?
Brokerage house Choice Broking says Vishal Mega Mart is a one-stop destination that caters to middle and lower middle income consumers in India. It offers a curated range of apparel, general merchandise and FMCG products through 645 stores across the country. The store has its own and third party brands to meet the everyday needs of consumers. Most of the company’s revenue (70%) comes from its own brands. As of FY24, a major portion of the company’s stores are in North India, followed by East India and there are plans to expand into West and South India in the future. In the last few years, the top and bottom line of the company has been continuously growing. The company primarily targets tier-2 cities, which are expected to grow their diversified retail sector at 32% CAGR between CY23 and CY28.
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Brokerage house AUM Capital says that Vishal Mega Mart Limited is one of the fastest growing supermarket retail chain stores in India. Rising disposable income and preference for quality and hygienic products among the population gives established companies like Vishal Megamart an edge over the unorganized sector. It also emerges as a strong competitor to other established branded retail chains like Spencer’s and Reliance Smart Bazaar. Healthy financial position and debt free status encourages this.
about the company
Vishal Mega Mart, which offers products across apparel, general merchandise and FMCG categories through its 626 stores and Vishal Mega Mart mobile application and website. Vishal Mega Mart competes in the market with Mukesh Ambani’s Reliance Retail, Tata Group’s Trent and grocery retailer Avenue Supermarts. The retailer’s financial performance has been strong in recent years. The company’s profit for the financial year ending March 2024 has increased by about 44 percent on an annual basis to Rs 461.9 crore. Whereas the revenue increased by 17.5 percent to Rs 8911.9 crore as compared to the last financial year.
(Disclaimer: The view or advice on the share is given by the brokerage house. These are not the personal views of Financial Express. There are risks in the market, so take expert opinion before investing.)
