Vishal Mega Mart, a prominent retail chain catering to the middle and lower-middle-income groups of India, is all set to launch its Initial Public Offering (IPO) in December 2024. The company, known for its wide range of affordable products across apparel, general merchandise, and fast-moving consumer goods, is poised to offer investors a unique opportunity. Here's an in-depth look at the Vishal Mega Mart IPO, its details, pricing, subscription, and expert analysis.

1. Vishal Mega Mart IPO Key Details:

The Vishal Mega Mart IPO, a book-built issue, aims to raise ₹8,000 Crores through an entirely Offer for Sale (OFS) of 10,256.41 lakh shares. The IPO opens for subscription on December 11, 2024, and closes on December 13, 2024. The allotment of shares is expected on December 16, 2024, and the listing is scheduled for December 18, 2024.

The share price band is set between ₹74 and ₹78 per share, with a market capitalization of ₹35,168.01 Crores at the upper price band of ₹78. The lot size is 190 shares, and retail investors are required to invest a minimum of ₹14,820. High-Net-Worth Individuals (HNIs) need to apply for a minimum of 14 lots (2,660 shares), totaling ₹2,07,480.

2. Financial Performance and Growth Potential:

Vishal Mega Mart has demonstrated strong growth in recent years, with its revenues increasing from ₹56,538.51 million in FY2022 to ₹89,451.27 million in FY2024. Its EBITDA has also shown consistent growth, reaching ₹12,817.82 million in FY2024, up from ₹8,690.21 million in FY2022. The company has reported a profit after tax (PAT) of ₹4,619.35 million in FY2024, reflecting strong profitability.

For the Vishal Mega Mart IPO, the company is issuing shares at a pre-issue EPS of ₹1.01 and a post-issue EPS of ₹1.02. The pre-issue P/E ratio is 77.23x, and the post-issue P/E ratio is 76.13x, compared to the industry P/E ratio of 131x. This suggests that the IPO is priced fairly, offering good value in comparison to its peers in the retail sector.

3. Vishal Mega Mart IPO GMP and Market Sentiment:

The Grey Market Premium (GMP) for the Vishal Mega Mart IPO is currently ₹16, indicating potential listing gains of 20.84%. However, investors should note that GMP is speculative and can vary based on market sentiment. The actual listing price of the shares will depend on the demand and supply conditions on the listing day.

As of December 11, 2024, the IPO has been subscribed 0.17 times on its first day of subscription, indicating moderate investor interest. The final subscription status can be tracked in real-time through the BSE website.

4. Subscription and Allotment Status:

Vishal Mega Mart IPO has already raised ₹2,400 Crores from anchor investors. A total of 30,76,92,307 equity shares were allocated to anchor investors at ₹78 per share. Retail investors can check their allotment status after December 16, 2024, by visiting the registrar’s website.

5. Objectives of the Vishal Mega Mart IPO:

Vishal Mega Mart will not receive any proceeds from the Offer for Sale, as the entire amount will go to the promoter selling shareholder after deducting the associated expenses and taxes. This is a purely secondary offering where existing shareholders are selling their stakes.

Vishal Mega Mart IPO Review:

Vishal Mega Mart is a strong retail brand in India, with a wide reach across the country and a focus on affordability and variety. The company’s strong financial growth, especially in terms of revenue and profitability, positions it as a promising investment opportunity. The IPO is priced reasonably, with a P/E ratio lower than the industry average, making it an attractive option for those seeking fair-priced retail sector investments.

Given the current GMP of ₹16, there is potential for listing gains of over 20%. For short-term investors looking for quick returns, the IPO may present an opportunity to gain on listing. However, long-term investors should evaluate the company’s future growth plans and market positioning before making decisions.

In conclusion, Vishal Mega Mart IPO appears to be a good option for those looking for listing gains and moderate growth in the retail sector, with fairly priced shares. We recommend applying to the IPO for short-term gains, while also keeping an eye on its long-term market strategy.

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