The Aryavarth Express
Agency(New Delhi): Vishal Mega Mart, a leading budget supermarket chain in India, is gearing up for a significant financial milestone with plans for a $1 billion initial public offering (IPO) that targets a valuation of up to $5 billion. Sources privy to the matter indicate that this strategic move is intended to support the expansion of the retailer’s network, which currently boasts 560 stores primarily situated in India’s smaller cities.
Ownership of Vishal Mega Mart is largely held by Switzerland’s Partners Group and India’s Kedaara Capital, both of which are poised to divest some of their shares through the IPO. However, the specifics regarding the proportion of ownership, the exact share to be sold, and whether they will maintain a majority stake post-IPO remain undisclosed.
As the retail market in India is expected to burgeon to $2 trillion by 2033, up from the current valuation of approximately $840 billion, Vishal Mega Mart’s IPO comes at an opportune time. The company’s focus on budget offerings in apparel, groceries, home appliances, and luggage positions it competitively against major players like Mukesh Ambani’s Reliance, Tata Group’s Trent, and Avenue Supermarts.
The IPO is slated for later this year, with investment banks being invited to pitch for roles this week. This decision capitalizes on the Indian stock market’s robust performance and the optimistic outlook for IPO activity, buoyed by rapid economic growth and a stable political climate.
Vishal Mega Mart has shown impressive financial growth, with a 36% increase in revenues to 75.9 billion rupees ($917 million) and a 60% surge in net profit to 3.2 billion rupees for the fiscal year ending in March 2023. The company’s ability to attract consumers transitioning from unbranded shops to organized retail chains, especially in the lower end of the market, underscores its potential for further growth and success in India’s retail sector.