Home/Blogs/Vishal Mega Mart IPO - Everything You Need to Know

Vishal Mega Mart IPO - Everything You Need to Know

ipo

Published Date: 23 Oct 2024Updated Date: 24 Oct 20246 mins readBy MOFSL

Share this article

India's retail landscape is a buzz with the announcement of Vishal Mega Mart IPO, a prominent player catering to the nation's middle and lower-middle income segments. For investors looking to tap into India's booming consumption story, this IPO presents a compelling opportunity. Here's a comprehensive look at what this means for you.

About Vishal Mega Mart

Vishal Mega Mart, a Gurugram-based retailer, has filed its Draft Red Herring Prospectus (DRHP) with SEBI to raise Rs 8,000 crore through an Initial Public Offering (IPO). The entire offering will be an offer-for-sale by promoter Samayat Services LLP, with no fresh equity issuance. Vishal Mega Mart is one of India’s leading offline-first retailers, known for its robust same-store sales growth.

The company is a one-stop destination catering to India’s middle and lower-middle income segments. Vishal Mega Mart offers a wide array of products through both in-house and third-party brands, spanning three major categories: apparel, general merchandise, and fast-moving consumer goods (FMCG). Operating across 626 stores nationwide, along with a mobile app and website, the retailer ensures a strong omnichannel presence. By March 2024, Vishal Mega Mart had secured its position among the top three offline-first diversified retailers in India, achieving rapid profit growth and impressive same-store sales performance in FY24.

Vishal Mega Mart - Offer for Sale

Vishal Mega Mart IPO’S Offer for Sale has two fold – to gain the advantages of listing the company’s equity shares on stock exchanges, enhancing visibility and brand recognition, and to facilitate an Offer for Sale of equity shares, raising ₹8,000 crore by the Promoter.

Notably, the company itself will not receive any proceeds from this Offer. The listing is expected to bolster the company’s market presence and provide a public platform for trading equity shares in India, further expanding its investor base and market reach.

Exciting opportunities ahead: Don’t forget to apply for Upcoming IPOs!

Industry Outlook

India is poised to become the world’s fastest-growing major economy, propelled by the middle-income segment's robust consumption, rapid urbanization, and growing demand from Tier-2 cities and beyond. The increasing female workforce is also a key contributor. Organized retail expansion and a shift towards discretionary spending are expected to drive the retail market, surpassing GDP growth. With rising disposable incomes and greater access to credit, more consumers are turning to lifestyle products like apparel and beauty, offering a prime opportunity for brands to meet these evolving needs.

Vishal Mega Mart Financials

Vishal Mega Mart showed strong financial performance for the three months ending June 30, 2024, and FY24. The company operated 626 stores as of June 2024, up from 611 in March 2024. Revenue for the June quarter was ₹2,596 crore, contributing to ₹8,912 crore for FY24, a rise from ₹7,586 crore in FY23. Profit before tax for FY24 was ₹621 crore, up from ₹431 crore in FY23, while the profit for the year reached ₹462 crore. The EBITDA margin remained stable at around 14%, with an EBITDA of ₹366 crore in June 2024. reflecting solid returns and growth.

Overall, the company continues to show strong financial performance, with steady revenue and profit growth, expansion in store count, and a maintained EBITDA margin, all of which position it well for further growth in the Indian retail sector.

Vishal Mega Mart Competitors

Vishal Mega Mart competes with Reliance Retail, DMart, and Trent Limited in India's retail market. Reliance Retail offers a wide range of products from electronics to groceries. DMart focuses on value-driven essentials and groceries, known for competitive pricing. Trent, under Tata, excels in fashion and lifestyle with brands like Westside and Zudio, while also expanding into groceries.

In FY 2024, Vishal Mega Mart operated 611 stores across 392 cities, with 11 million sq. ft. of retail space, generating ₹8,094 per sq. ft., focusing on Apparel (44%), FMCG (27%), and General Merchandise (29%). Reliance Retail led with 18,836 stores and ₹34,523 revenue per sq. ft. across 79 million sq. ft., while DMart managed 365 stores, generating ₹33,635 per sq. ft. from Food (57%) and Non-Food FMCG (21%). Trent Limited operated 903 stores, excelling in fashion and lifestyle retail.

Conclusion

Vishal Mega Mart's upcoming IPO offers investors a chance to be part of India's dynamic retail growth story. With strong financials, a strategic expansion plan, and a deep understanding of its target market, the company is well-placed for continued success.

As India continues its ascent as a global economic powerhouse, driven by a young and growing consumer base, investing in companies like Vishal Mega Mart could be a rewarding move. For those seeking to diversify their portfolio with a stake in the booming retail sector, this IPO is worth serious consideration.