The shares for D-Mart / Avenue Supermarts is allocated now. You can check the allotment status for D-Mart IPO (Avenue Supermarts IPO at the registrar link (Link Intime) below:
https://www.linkintime.co.in/publicissues/default.aspx
I applied for 100 shares and was allocated 50 shares. See screenshot.
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Avenue Supermarts has opened its IPO on 8th March 2017. It is the operator company of D-Mart supermarkets.
The retail chain’s IPO is also significant on the back of its strong promoter entity, Radhakishan Damani. He is considered among the major names in the markets as a trader and value investor and this is considered to be his entry into the big league.
Issue Details of Avenue Supermarts IPO (operator of D-Mart):
- IPO Open : 8th March to 10th March 2017
- Issue Price band: Rs 295 – 299 per share
- Issue Size: Rs 1870 crores ( 6.23 crores shares)
- Market lot : 50 shares
- Minimum Investment: Rs 14950 (Upper band)
- Maximum Retail investment – 650 shares – Rs 194350 (at upperband)
- Book Running Lead Managers : Kotak Mahindra, Axis, Edelweiss, ICICI Sec, JM Sec, Motilial, SBI, Inga
- Registrar –
- Listing: BSE/NSE
IPO Issue Allocation
- Qualified institutional buyers (QIBs) – 50% of the total issue size.
- Non-institutional investors (NIIs) – 15% of the issue size.
- The retail quota limit in the issue = 35% of the issue size.
Background:
Avenue Supermarts owns and operates hypermarkets and supermarkets retail chain D-Mart. Owned by investor Radhakishan Damani, D-Mart is a pure food and grocery retailer
D-Mart, which launched its first store in 2000, has focused solely on expanding its hypermarket retail chain.
Currently, there are around 110 D-Mart hypermarket stores in 26 cities. On an average, the company has been opening 10-15 stores per annum and hopes to continue or accelerate it depending on the market.
As of August 31, 2016, the company had 4,225 full-time employees and also higher number of employees on contract.
Number of Stores:
| State | No of Stores | Revenue Share |
| Maharashtra | 58 | 62.50% |
| Gujarat | 26 | 18.80% |
| Telangana | 13 | 10% |
| Karnataka | 7 | 6% |
| Andhra Pradesh | 3 | 1% |
| Madhya Pradesh | 3 | 0.70% |
| Chattishgarh | 1 | 0.50% |
| NCR | 1 | 0.50% |
| 112 |
Revenue Segments
| 2016 | 2015 | 2014 | 2013 | 2012 | |
| FMCG | 53% | 53% | 53% | 53% | 53% |
| Non FMCG | 21% | 21% | 21% | 21% | 21% |
| General Mechandise | 26% | 26% | 26% | 26% | 26% |
Promoters holdings:
Promoter & Promoter group holds 91% shares. Top promoters are Radhakishan Damani (43.8%) , Bright Star (15.8%), Gopikishan Damani (13.72%)
Objective of the issue:
- Repayment or prepayment of a portion of loans and redemption or earlier redemption of NCDs availed by our Company – 1080 crores
- Construction and purchase of fit outs for new stores – 367 crores
- General Corporate purposes
Anchor Investors:
The company has raised Rs 561 crore by allotting 1.87 crore shares to 35 anchor investors at the upper price band of Rs 299 apiece.
Financials:
| 2016 | 2015 | 2014 | 2013 | 2012 | |
| In Rs Crores | |||||
| Revenue | 8606 | 6458 | 4702 | 3355 | 2222 |
| Revenue Growth | 33% | 37% | 40% | 51% | |
| Net Profit | 321 | 212 | 161 | 94 | 61 |
| Net Profit Growth | 51% | 32% | 71% | 54% | |
| Equity + Reserves | 1521 | 1200 | 956 | 789 | 684 |
| Long term Borrowings | 908 | 714 | 457 | 371 | 264 |
| Debt Equity Ratio | 0.78 | 0.75 | 0.67 | ||
| EPS | 5.72 | 3.87 | 2.95 | ||
| RoNW | 21% | 17.60% | 16.80% |
D-Mart’s better financial performance in comparison to its peers has been driven by its differentiated business model, wherein 90% of D-Mart stores are located in properties owned by the firm, unlike most retail firms which are burdened by the high cost of rentals.
Risks:
Valuation as compared to its peers:
| EPS | PE | |
| Avenue Supermart | 5.72 | |
| Future Retail | 0.66 | 240 |
| Trent | 18.94 | 124 |
At the higher price band of Rs 299, the offer is valued at 36 times P/E and 1.6 times M.Cap/sales on 9MFY17 annualised basis (post dilution).
While there are no direct comparable, companies like V-Mart (40 times P/E on FY17E), TrentBSE (49 times) and Future Retail (34 times) having significant retail presence are trading at higher valuations.
Should you consider investing:
| SP Tulsian | Subscribe |
| Choice Broking | Subscribe |
| Yes Securities | Subscribe |
| IIFL | Subscribe |
| Ambit Capital | Subscribe |
| Reliance Sec | Subscribe |
| Emkay Global | Subscribe |
| Angel Broking | Subscribe |
| KR Choksey | Subscribe |
The performance of the company is better than its listed big peers. Continous growth in Revenue & net Profit growth. Also the promoter (Rakesh Damani) is one of the reputed investor.
Investors can consider subscribing for this IPO for medium to long term.
Disclaimer: The articles or analysis on this website should not be constituted as Investment advice. Please consult your financial advisor before making any investments.
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