Vishal Mega Mart eyes Rs 8,300 crore IPO to expand its footprint: Report

Vishal Mega Mart eyes IPO: Vishal Mega Mart, the country’s prominent budget supermarket chain, is planning to raise Rs 8,300 crore ($1 billion) via initial public offering (IPO), sources familiar with the matter told news agency Reuters. The IPO is expected to value the retailer at up to Rs 41,500 crore ($5 billion), with proceeds earmarked for expanding its store network.

Switzerland's Partners Group and India's Kedaara Capital, holding a majority stake in Vishal Mega Mart, will each offer shares in the IPO, according to insiders requesting anonymity due to the private nature of the discussions.

While the exact ownership details of Partners Group and Kedaara Capital remain undisclosed, it remains unclear how much of their stake they intend to divest and whether they plan to retain a majority holding post-IPO.

Gunender Kapur, Chief Executive of Vishal Mega Mart, and representatives from Kedaara Capital did not respond to requests for comments, while Partners Group declined to offer any statement.

Vishal Mega Mart currently operates 560 stores primarily in smaller cities, offering a range of clothing and grocery items, positioning itself against competitors like Reliance Retail, Tata Group's Trent, and Avenue Supermarts.

The retailer's decision to go public comes amid buoyant stock markets and a robust economic outlook. IPO activity in India is expected to escalate, bolstered by stable political dynamics and anticipated economic growth under Prime Minister Narendra Modi's leadership.

In its last fiscal year ending March 2023, Vishal Mega Mart witnessed a 36 per cent surge in revenues to Rs 7,590 crore while net profits soared by 60 per cent to Rs 320 crore, according to reports by Fitch-owned India Ratings.

With India's retail market set for substantial growth, estimated to reach $2 trillion by 2033, Vishal Mega Mart aims to capitalise on the opportunity, stressing its dominant position in brick-and-mortar retailing, especially in smaller towns.

The retailer, known for its affordable pricing strategy, draws approximately half of its sales from apparel, offering T-shirts starting from as low as Rs 99 and jeans priced at Rs 750. In addition to apparel, Vishal Mega Mart also retails home appliances, luggage, and groceries.

Partners Group and Kedaara Capital acquired Vishal Mega Mart for approximately $350 million in 2018 from TPG and Shriram Group.

(With Reuters inputs)