Vishal Mega Mart planning $1 billion IPO: Report

India’s Vishal Mega Mart is planning a $1 billion preliminary public providing that might worth the funds grocery store chain at as much as $5 billion with a few of the proceeds earmarked so as to add shops, two individuals with direct data of the plan mentioned.

Switzerland’s Companions Group and India’s Kedaara Capital, which collectively have a majority stake in Vishal Mega Mart, will every promote shares within the providing, mentioned the individuals, declining to be recognized because the discussions had been non-public.

It was not instantly clear precisely how a lot of Vishal Mega Mart the 2 non-public fairness corporations personal, how a lot they might promote and if they might retain a majority holding.

Vishal Mega Mart Chief Govt Gunender Kapur didn’t reply to Reuters requests for remark. Kedaara additionally didn’t reply whereas Companions Group declined to remark.

The retailer has 560 shops, primarily in smaller cities, that promote garments and grocery objects. It competes with Indian tycoon Mukesh Ambani’s Reliance, Tata Group’s Trent and grocery retailer Avenue Supermarts.

Funding banks have been invited to pitch for the IPO this week and the providing is more likely to happen later this yr, the individuals mentioned.

The plans come at a time when Indian inventory markets are buying and selling close to document highs and the benchmark NIFTY index has climbed 12 per cent over the past six months.

Bankers and analysts anticipate IPO exercise in India to realize tempo amid speedy financial development and a secure political surroundings with Prime Minister Narendra Modi more likely to simply win a 3rd time period in an election due by Could.

Vishal Mega Mart’s revenues jumped 36 per cent to 75.9 billion rupees ($917 million) in its final monetary yr ended March 2023, whereas web revenue surged 60 per cent to three.2 billion rupees, in accordance with a report by Fitch-owned India Rankings.

India’s retail market may very well be price $2 trillion by 2033 in contrast with about $840 billion at the moment, in accordance with estimates from Boston Consulting Group.

Brick-and-mortar companies proceed to dominate many of the nation’s retail sector regardless of the rise of e-commerce platforms like Amazon and on the decrease finish of the market, customers are more and more shifting from roadside unbranded outlets to chains.

Vishal Mega Mart, which sells T-shirts from as little as 99 rupees ($1.5) and denims from $9, positive aspects about half of its gross sales from attire, in accordance with the sources. It additionally sells house home equipment and baggage along with groceries.

Companions Group and Kedaara acquired Vishal Mega Mart for about $350 million in 2018 from rival buyout corporations TPG and India’s Shriram Group.