The Vishal Mega Mart IPO is one of the most anticipated initial public offerings (IPOs) in 2024. Aimed at catering to the middle and lower-middle income segments of India, the company offers a diverse range of products, including apparel, general merchandise, and fast-moving consumer goods. With a presence across 626 stores (as of June 30, 2024), Vishal Mega Mart is now offering shares to the public in an Offer for Sale (OFS) worth ₹8,000 Crores.

Vishal Mega Mart IPO Details

The IPO opens on December 11, 2024, and closes on December 13, 2024. The price band for the IPO has been set at ₹74 to ₹78 per equity share, with a lot size of 190 shares. Retail investors can invest a minimum of ₹14,820, while High-Net-Worth Individuals (HNIs) must invest in at least 14 lots (₹2,07,480). The Market Capitalisation of the company, at the upper price band of ₹78, is estimated to be ₹35,168.01 Crores.

Subscription & GMP Update

As of December 13, 2024, the IPO has been subscribed 27.28 times on the final day of the subscription period. The Grey Market Premium (GMP) for the Vishal Mega Mart IPO is ₹16, indicating a 20.84% expected listing gain. The IPO price is ₹78, and the anticipated listing price is ₹94.

For investors looking to track the progress of their application, the IPO allotment date is December 16, 2024, with listing scheduled for December 18, 2024.

Financial Performance & Valuation

Vishal Mega Mart has shown impressive growth in its financial performance, with revenues increasing from ₹56,538.51 Million in FY22 to ₹89,451.27 Million in FY24. The EBITDA has similarly grown from ₹8,690.21 Million to ₹12,817.82 Million during the same period. The profit after tax for FY24 stood at ₹4,619.35 Million.

The IPO's pre-issue P/E ratio is 77.23x, and the post-issue P/E ratio is 76.13x, significantly lower than the industry P/E ratio of 131x. Additionally, the ROCE for FY24 is 68.76%, and the RoE is 8.18%, making the company an attractive investment at the current valuation.

IPO Objective & Use of Funds

The Vishal Mega Mart IPO will not receive any proceeds from the Offer for Sale as it is entirely a secondary sale by the promoter selling shareholder. The funds raised will go to the promoters after deducting the relevant offer-related expenses.

Grey Market Premium (GMP) & Listing Expectations

The Grey Market Premium (GMP) for Vishal Mega Mart's shares is expected to be ₹16, based on the company’s robust financial performance. Although the GMP cannot be used as a definitive indicator of future listing price, it shows potential for a 20.84% listing gain.

Investment Recommendation

With strong financials, a good valuation compared to its industry peers, and an attractive GMP, we recommend investors to apply for the Vishal Mega Mart IPO for listing gains.

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