Vishal Mega Mart IPO

Vishal Mega Mart IPO Details

Vishal Mega Mart IPO Date

The launch date for Vishal Mega Mart IPO, as per the company filing with SEBI, is December 11, 2024. The closing date for the issue is December 13, 2024. The allotment status for the IPO is expected to be finalised on December 16, 2024. 

Investors who have been allotted shares can expect them to be credited to their demat account on December 17, 2024. The shares will be listed on the NSE and the BSE on December 18, 2024. 

Vishal Mega Mart IPO Price Band

The IPO is a book-built issue of ₹ 8,000 crore and is entirely an offer-for-sale (OFS) of 102.56 crore shares. The Vishal Mega Mart IPO price band has been set between ₹74 and ₹78 per share. Interested investors can choose a price within this band to apply for the IPO. 

The Vishal Mega Mart IPO listing price will be determined on December 18. The listing price is the price at which a company’s shares debut on the stock exchanges.

Vishal Mega Mart IPO Lot Size

The Vishal Mega Mart IPO details have been declared. The minimum lot size for an application is 190 shares, and the minimum investment required by retail investors is ₹14,820.

Vishal Mega Mart IPO Objective

The entire proceeds from the issue will be received by the promoter selling shareholder, after deducting the offer expenses and relevant taxes. The company will not receive any proceeds from the IPO. The objective of the offer is to achieve the benefits of listing shares on the bourses and carry out the offer-for-sale for the promoter-selling shareholders. The listing will also enhance the company’s visibility and brand image. Samayat Services LLP is the promoter-selling shareholder of the company.

About Vishal Mega Mart

Incorporated in 2001, Vishal Mega Mart is a one-stop destination for middle and lower-middle-income groups in India. It operates through a network of 645 Vishal Mega Mart stores (as of September 30, 2024), a mobile application and a website. The company offers a diverse range of products, including apparel, general merchandise and fast-moving consumer goods (FMCG), through both its own brands and third-party brands. The company has a presence across 414 cities in 28 states and two union territories.

As of March 31, 2024, the company is ranked among the top three offline-first diversified retailers in India based on retail space. The company is also the fastest-growing in terms of profit after tax growth from FY 2021 to FY 2024. Additionally, it is one of the top retailers for same-store sales growth in FY 2024. 

The company uses a hub-and-spoke distribution model to source products and manage its in-store inventory. As of September 30, 2024, Vishal Mega Mart operates one central distribution centre and 17 regional distribution centres, each located near its major demand areas.

Vishal Mega Mart's major focus is on sales through its own brands. The company has a diverse and growing portfolio of brands across the apparel, general merchandise, and fast-moving consumer goods product categories. In FY24, six of the company’s own brands exceeded sales of ₹500 crore each, while 19 brands reported sales of above ₹100 crore each. 

Meanwhile, own brand sales grew at a CAGR of 27.72% between FY 2022 and FY 2024, and they accounted for 72.86% of overall revenue in the six months ending September 30, 2024. Adjusted same-store sales growth grew by 12.57% during the same period.  

Between FY22 and FY24, it saw a CAGR rise of over 16.8% in its revenue from operations and 31.5% in its net profit. Moreover, India’s middle-income population has grown from approximately 201 million households in 2018 to 225 million in 2023, creating a significant market for affordable and high-quality products. The total addressable market for aspirational retail in India was ₹68-72 trillion in 2023. It is expected to grow at a CAGR of 9% to reach ₹104-112 trillion by 2028. This indirectly offers companies like Vishal Mega Mart a great opportunity to capture the market share. 

Now, Vishal Mega Mart Limited is launching its initial public offer (IPO). The total IPO issue size is ₹8,000 crore, comprising entirely of an offer for sale. The money raised from the issue will be received by its selling shareholders. Its shares will be listed on the NSE and BSE.

Company Name:  Vishal Mega Mart    

Company Established On: 2001

Company Type: Private Limited Company

Financial snapshot

Vishal Mega Mart Limited IPO Analysis

Strengths and Opportunities

1. The company serves a large and growing section of the Indian population, serving as a one-stop destination for middle and lower-middle-income groups in the country. 
2. It has 645 operational stores across India as of September 30, 2024, offering a large network of stores in even Tier 2 cities with as many as 451 stores in Tier 2 cities and beyond. 
3. The company follows a customer-centric approach and has a huge consumer base. It focuses on maximising variety, affordability, quality and convenience for its customers. 
4. It has a diversified portfolio of products from both the company’s own brands and third-party brands. It refreshes its product offering consistently to stay up-to-date with the latest trends.
5. It offers affordable products, starting from as inexpensive as ₹89 for women’s western wear category and ₹99 for men’s t-shirts. 
6. The company’s total stores increased to 645 in 2024 from 501 in 2022, showcasing a track record of successful growth and establishing a pan-India presence. 
7. Its operations are supported by technology-enabled systems that help it manage inventory, source products, and perform data analytics, among other things. 
8. Between FY22 and FY24, it saw a CAGR rise of over 16.8% in its revenue from operations and 31.5% in its net profit.
9. The EBITDA margin for the six months ended September 30, 2024, and 2023 was 13.27% and 13.54%, respectively. For FY2024, 2023, and 2022, the margin was 14.01%, 13.45%, and 14.38%, respectively. 

Risks and Threats

1. The company relies on third-party vendors to manufacture all of its products under its own brands, which subjects it to risks, like delays in production and changes in the cost of acquisition, that can affect its business, workflow, and financial conditions. 
2. The company has experienced instances of disruption in supplies from its vendors in the past, and this can happen again in the future and can affect its business operations and cash flow. 
3. It also sometimes has to reject manufactured products from its vendors due to quality issues such as improper assembly and inadequate packaging. 
4. The company has received two directives from the Enforcement Directorate requesting information. Adverse outcomes in these matters can lead to legal proceedings and penalties for the enterprise. 
5. It could fail to identify and respond to its customers' changing preferences, leading to decreased demand for its products. This can adversely impact the company’s business operations and financial performance. 
6. The company relies heavily on its stores in Uttar Pradesh, Karnataka, and Assam. Any negative developments in these states can adversely impact the business and cash flows. 
7. It has experienced negative overall cash flows in the past, like in the financial year ending 2022 and 2023, which can affect its business operations if it happens in the future. 
8. The company has contingent liabilities, and its financial condition could be adversely affected if these contingent liabilities materialise. 
9. As its primary distribution centre is situated in North India, it exposes the company’s supply chain to regional risks that can negatively affect its operations.
10. The business is subject to seasonal fluctuations.
11. Disruptions in the company's IT systems or data breaches can negatively affect the business and financial condition. 

How to apply for the Vishal Mega Mart IPO?

If you are interested to invest in Vishal Mega Mart IPO, following are the steps to apply:

1. Login to your Upstox account, using your six-digit PIN
2. After successfully logging in, click on ‘Discover’
3. On the Discover tab, you will find the ‘Invest in IPO’ section
4. Under the Invest in IPO section, look for the ‘Vishal Mega Mart IPO’ tab and click on it
5. Now fill in all the required information, like ‘bid price’ and ‘lot size’
6. Confirm and click on ‘Apply’
7. Accept the mandate on your UPI app

You can also pre-apply for the Vishal Mega Mart IPO on Upstox which usually begins a day before the IPO opens for subscription.