DMart is owned and operated by Avenue Supermarkets. With a profit of Rs 300 crores in the fiscal year 2016 on revenues of about Rs 8,600 crores, ambitious Avenue Supermarkets is all set to raise Rs 1,870 crores from their initial IPO. The Initial Public Offering will start on March 8 and end on March 10, 2017. The price band is set to Rs 295 – 299 per share offered.
With the funds raised through IPO, the company will utilize it to repay or prepay their debts in the form of loans and redemption / early redemption of Non-Convertible Debentures. Moreover, as per company plans, the proceeds will be used for constructing and procuring the new stores as well as for other general business purposes.
Dmart IPO Bankers
The Avenue Supermarkets IPO will be managed by 9 merchant bankers’ viz. Axis Capital, Edelweiss Financial Services, HDFC Bank, ICICI Securities, Inga Capital, JM Financial Institutional Securities, Kotak Mahindra Capital, Motilal Oswal Investment Advisors and SBI Capital Markets.
The IPO will result into the fractional exit of the Damani family, who holds 91.34% shares of Avenue Supermarkets, to allow the new shareholders to gain the ownership. The firm is owned by Radhakishan Damani who is also named as a mentor to India’s Warren Buffet, Rakesh Jhunjhunwala. Many market investors follow Radhakishan Damani’s investment pattern. He is one of the biggest names in India’s stock market. A net worth of $1.15 billion made him rank 98th in Forbes India Rich list 2015. With such strong leadership and investment skills, Rakesh Jhunjhunwala and other market investors are looking forward to the IPO.
Avenue Supermarkets has out slashed their competitor, Future Retail which declared the net profit of Rs 14.55 crores in the fiscal year 2016 after recovering the previous year loss of Rs 379.21 crores, with an annual turnover of Rs 6,845 crores.
Another competitor, Reliance Retail, a subsidiary of Reliance industries, made a net profit of Rs 306.54 crores, but for annual revenue of Rs 18,399 crores, which is more than double of Avenue Supermarkets.
According to the market analyzers, the IPO is just 10 percent of the firm’s valuation. Avenue Supermarket is a market leader in earning the return of capital employed of 24.2 percent in FY 2015-16. However, Trent, which is the next best company in the retail market, has a return on capital employed of 3.6 percent only.
With such tremendous business performance and bright future prospects, the market is expecting immense gain on listing, which is already making investors eye on the IPO. The success of the IPO, will make Damani jump several ranks in Forbes list soon.