Vishal Mega Mart IPO: Key strengths, risks, financials, business model and more

Vishal Mega Mart IPO will open for subscription next week, on December 11. The hypermarket chain operator aims to raise ₹8,000 crore via its initial public offering (IPO).

Here are the key details about the mainboard issue for the investors interested in participating in the IPO subscription.

Vishal Mega Mart IPO: Price band, lot size and minimum investments

Retail investors can apply for the issue by placing bids for a minimum lot size of 190 shares which aggregates to an investment of ₹14,820.

The minimum bid quantity for Small Non Institutional Investors (sNII) is 14 lots, or 2,660 shares, which amounts to an investment of ₹2,07,480. The application size for the Big Non Institutional Investors (bNIIs) is 68 lots, or 12,920 shares, aggregating to ₹10,07,760.

Vishal Mega Mart has reserved 50% of the net offer size for the Qualified Institutional Buyers category. The company has reserved as much as 35% of the net issue for retail individual investors and 15% of the net issue has been reserved for the Non Institutional Investor (NII) category.

Vishal Mega Mart IPO key dates

Shares of Vishal Mega Mart will be listed on the NSE and BSE. The tentative IPO listing date is Wednesday, December 18.

Vishal Mega Mart financials and key competitors

The revenue of the company for the quarter ended September 30 of FY25 stood at ₹5,053.42 crore. The profit-after-tax of the company for Q2FY25 stood at ₹254.14 crore and the company’s net worth stood at ₹5,923.74 crore.

Vishal Mega Mart’ revenue grew more than 17% to ₹8,945.13 crore in FY24 compared to ₹7,618.89 crore in FY23. The company posted a net profit of ₹461.94 crore in FY24 increasing nearly 44% compared to a net profit of ₹321.27 crore in FY23. Vishal Mega Mart’s net worth increased nearly 9% to ₹5,646.59 crore from ₹5,180.84 crore in FY23.

Vishal Mega Mart said in its Red Herring Prospectus (RHP) that the Indian retail and consumer industry is highly competitive. The company faces competition from both existing retailers and new entrants to the industry. The company also faces competition from online retailers and ecommerce marketplaces. The company claimed in its RHP that its competitors include Reliance Retail, Avenue Supermarts (Dmart) and Trent Ltd.

Vishal Mega Mart business model

Vishal Mega Mart operates as a one stop shop for middle and lower-middle income customers. The company curates a diverse range of merchandise through its portfolio of own brands and third party brands. The company offers products across three apparel, general merchandise and fast-moving consumer goods. Vishal Mega Market has a pan-India presence with a network of 645 Vishal Mega Mart stores, as of September 30, 2024. The company also sells its goods via its mobile application and website.

Vishal Mega Mart IPO: Risk and threat

• The company does not manufacture any of the products which are sold under its own brand in its stores and relies entirely on third party vendors. The manufacturing of products is required to meet product specifications and other manufacturing standards, failure to meet the standards can adversely affect the company’s business.
• A failure to identify and respond to changing consumer preferences in a timely manner could cause a decrease in demand negatively impacting the business.
• If the company does not identify consumer demand accurately and maintain inventory accordingly it can adversely affect the company’s business.
• The company operates its stores, distribution centres and corporate offices from premises that are taken on a leasehold basis, this exposes the company to risks associated with leasing real estate.

Vishal Mega Mart IPO: Key strengths

• The company is focused on serving a large and fast growing section of the Indian population through its diversified product portfolio.
• The company has a consumer-centric approach which results in a loyal consumer base.
• Vishal Mega Mart claims that it has a diverse and growing Portfolio of its own brands across the apparel, general merchandise and fast-moving consumer goods product categories.
• Vishal Mega Mart has a pan-India Presence as it operates through a network of 645 stores located across 414 Tier 1 cities, Tier 2 cities and in India as of September 30, 2024.

About Vishal Mega Mart

Vishal Mega Mart was incorporated in 2001. The company operates as a hypermarket chain which sells a diverse range of products such as apparel, groceries, electronics, and home essentials. The company operates through an asset-light business model. Vishal Mega Mart leases all its distribution centers and stores and its products are manufactured by third-party vendors.