Vishal Mega Mart IPO opens for public subscription on Wednesday, December 11, 2024; Know analysts take before investing
Vishal Mega Mart IPO Subscription Day 1: The Vishal Mega Mart IPO is scheduled to open for public subscription today, December 11, 2024. This Rs 8,000 crore public offering will remain open for subscription until Friday, December 13, 2024. The offer consists entirely of an offer for sale (OFS) of 1,025,641,025 shares.
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Vishal Mega Mart IPO Price Band
Backed by Kedaara Capital, Vishal Mega Mart has set a price band of Rs 74-78 per equity share for its Rs 8,000 crore IPO, which will close on December 13. The bidding window for anchor investors will open on December 10 and remain open for a day.
The minimum lot size for retail investors is 190 shares, requiring an investment of Rs 14,820. Small non-institutional investors must bid for a minimum of 14 lots, or 2,660 shares, totaling Rs 2.07 lakh. Large non-institutional investors will need to bid for at least 68 lots, or 12,920 shares, amounting to Rs 10.07 lakh.
Vishal Mega Mart IPO: Key Dates
The IPO will open for public subscription on December 11 and close on December 13. Allotments are expected to be finalized by December 16, with the shares scheduled for listing on the BSE and NSE on December 18.
Vishal Mega Mart IPO: Grey Market Premium (GMP)
Ahead of the issue, the Vishal Mega Mart was boasting a GMP of around Rs 24-25, which is a 31% premium over the issue price. This marks an increase from the Rs 17 GMP seen over the weekend.
The Grey Market Premium (GMP) refers to the unofficial price at which a company’s shares are traded in the grey market before they are officially listed on stock exchanges, typically during an IPO (Initial Public Offering). This market operates outside formal exchange channels.
Traders and investors use GMP as an indicator of market sentiment toward an upcoming IPO. A higher GMP suggests strong demand for the shares and a favorable outlook for the listing. Conversely, a lower or negative GMP may indicate weaker demand and a potentially less successful listing.
It is important to note that GMP is not an official or regulated metric and can vary depending on market conditions and investor sentiment. Essentially, it is a speculative figure based on informal trading activity in the grey market.
Vishal Mega Mart IPO Proceeds
The entire Rs 8,000 crore IPO is an offer for sale (OFS), meaning that the proceeds will not go to the company but will be paid to the selling shareholders.
Vishal Mega Mart IPO Review
Vishal Mega Mart’s upcoming IPO has garnered positive reviews from several brokerage firms, including Bajaj Broking, Swastika Investmart, Master Capital Services, Choice, and AUM Capital. Analysts are generally optimistic about the offering from a long-term investment perspective.
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Choice – Long-Term Investment Recommendation
Choice Brokerage has advised investors to subscribe to the Vishal Mega Mart IPO with a long-term view. The firm highlighted the steady growth in both the top and bottom lines over the years. The company’s main focus on Tier-2 cities, which are expected to grow at a 32% CAGR in the diversified retail sector between CY23 and CY28, is seen as a positive indicator. While the company is demanding an EV/Sales multiple of 3.8x at the higher price range, which may seem fully priced, the steady revenue growth from expanding stores and its own brand sales is expected to benefit margins. Additionally, the company’s strong inventory and working capital management suggest a sustainable long-term outlook.
AUM Capital – Long-Term Subscription
AUM Capital analysts also recommend subscribing to the IPO for long-term gains. They note that rising disposable income and a preference for quality, hygienic products provide Vishal Mega Mart with a competitive edge over unorganised retail and competing brands such as Spencer’s and Reliance Smart Bazaar. The company’s robust financials and debt-free status further strengthen its long-term prospects.
Master Capital Services – Long-Term Buy
Master Capital Services has also given a long-term recommendation for the IPO. They see Vishal Mega Mart as a key player in the retail market, particularly for middle and lower-middle-income consumers. The company is expected to drive same-store sales growth through initiatives such as expanding its product portfolio, offering hyperlocal options, leveraging technology, and enhancing customer loyalty and in-store experiences.
Bajaj Broking – Long-Term Subscription
Bajaj Broking analysts have recommended a long-term subscription for the IPO, though they note that the issue is priced at a P/BV of 5.94, based on an NAV of Rs 13.14 as of September 30, 2024. They also highlight that at the higher price range, the price-to-earnings (P/E) ratio stands at 69.03 for FY25 annualized earnings, which is quite aggressive. For FY24 earnings, the P/E stands at 75.73, which could indicate that the IPO is priced on the higher side.
Swastika Investmart – High-Risk Investors
Swastika Investmart views the IPO as suitable for high-risk investors looking to gain exposure to the retail sector. While they consider Vishal Mega Mart’s market position as one of India’s leading offline retailers as a strength, they caution that the IPO’s valuation may carry higher risk. However, the overall outlook for the company remains positive in their assessment.
About Vishal Mega Mart
Vishal Mega Mart (VMM) is a leading retail chain catering to middle- and lower-middle-income consumers across India. Its product range includes a combination of in-house and third-party brands, covering three key categories: apparel, general merchandise, and fast-moving consumer goods (FMCG).
The company recorded revenues of Rs 8,900 crore in FY24 and operates 645 stores across 414 cities in 30 states and union territories, covering a retail space of 11.5 million square feet.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
