The maiden public offering of V-Mart Retail, a value retailer focusing on tier II and tier III cities, was subscribed by 1.2 times at the close of issue. The Delhi-based firm was looking to raise Rs 97 crore at the upper end of the price band of Rs 195-Rs 215 per share.

Most of the bids have come in at the lower end of the price band. The issue was subscribed 1.52 times by qualified institutional buyers (QIBs), 1.39 times by non-institutional investors and 0.79 times by retail investors.

Naman Finance & Investment Pvt Ltd, an investment entity of the $40 billion Aditya Birla Group (separate from Aditya Birla Private Equity), will make over 3x its investment in the retailer at the lower end of the price band. Naman Finance will get Rs 34 crore by selling part of its stake in the issue.

V-Mart was started in 2002 by Delhi-based Lalit Agarwal, who is the first cousin of Vishal Retail chairman RC Agarwal. The retail business of debt-laden Vishal was jointly acquired by TPG and the Shriram Group in 2010. Public-listed Vishal Retail has been named V2 Retail since then.

V-Mart had also raised Rs 14.16 from anchor investors and 26.25 crore from pre-IPO investors.

Anand Rathi Advisors was the book running lead manager to the issue.

Naman Finance & Investment acquired the stake in 2008 for Rs 20.5 crore or Rs 62 per share, according to VCCircle estimates. The fibre-to-telecom group is also present in retail business through fashion & textiles player Madura Lifestyle, food & grocery retail chain More and the recently acquired apparel retail business of Pantaloon Retail.

V-Mart’s total income stood at Rs 250 crore for the eight-month period ended Nov 30, 2012, and profit after tax was Rs 13 crore for the same period.

Total income grew at a CAGR of 30.19 per cent – from Rs 98 crore in FY2008 to Rs 282 crore in FY2012. Its profit after tax grew at a CAGR of 31.71 per cent – from Rs 3.52 crore to Rs 10.61 crore in the same period. The company has total debt of less than Rs 40 crore.

In FY12, around 76 per cent of V-Mart’s total income has come from apparels & general merchandise and 24 per cent from Kirana Bazaar.

V-Mart owns and operates 62 stores spread across 53 cities and 10 states & union territories, with a total area of 5.06 lakh sq. ft.

(Edited by Sanghamitra Mandal)

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