Vishal Mega Mart, a leading supermarket chain in India, has submitted its updated draft red herring prospectus (UDRHP) to the Securities and Exchange Board of India (Sebi) as part of its plans to raise Rs 8,000 crore through an initial public offering (IPO). The IPO will be an offer-for-sale (OFS) by the company’s promoter, Samayat Services LLPwhich holds a 96.55% stake in the business. This means that Vishal Mega Mart itself will not receive any funds from the IPO, as the proceeds will go to the selling shareholder.
IPO Process and Updated Filing
Vishal Mega Mart’s updated draft follows Sebi’s approval of its confidential offer document on September 25, 2024. The company first filed its offer document in July through the confidential pre-filing route. Under this process, Sebi reviews the confidential Draft Red Herring Prospectus (DRHP) and provides feedback. After incorporating Sebi’s comments, the company files the UDRHP, which is made available for public comments. Once public comments are incorporated, a final UDRHP-II is submitted.
The IPO is a significant development for the Gurugram-based retailer, which caters to India’s middle- and lower-middle-income consumers. Vishal Mega Mart offers a wide variety of products, including in-house and third-party brands, across three categories: apparel, general merchandiseand fast-moving consumer goods (FMCG).
Vishal Mega Mart’s Expanding Reach
As of June 30, 2024, Vishal Mega Mart operates 626 stores across India, along with its mobile app and website. The company has established itself as a major player in India’s retail landscape, targeting the aspirational and value-conscious consumer base.
The retail market in India was valued at Rs 68-72 trillion in 2023and it is projected to grow to Rs 104-112 trillion by 2028 at a compound annual growth rate (CAGR) of 9%, according to a report by Redseer. This growth is fueled by several factors, including increased urbanization, higher expectations for product quality, and the rising prominence of organized retail in India.
Market and IPO Outlook
Vishal Mega Mart is positioned to benefit from the shift towards organized retail in India, driven by better product assortments, competitive pricing in FMCG, and consumer demand for quality. As the Indian retail market continues to grow, Vishal Mega Mart’s strong presence and consumer focus position it for further success in the coming years.
Leading financial firms, including Kotak Mahindra Capital Company, ICICI Securities, Intensive Fiscal Services, Jefferies India, J.P. Morgan Indiaand Morgan Stanley India Companyare serving as the book-running lead managers for this IPO.
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