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General Atlantic, GIC among D-Mart anchor investors

08 March, 2017

Private equity firm General Atlantic and Singapore’s sovereign wealth fund GIC Pte Ltd are among the anchor investors that have bet on Avenue Supermarts Ltd, which runs hypermarkets under the D-Mart brand, ahead of its initial public offering.

Avenue Supermarts raised Rs 561 crore ($84 million) by selling 18.76 million shares at Rs 299 apiece to anchor investors, the company said in a stock-exchange filing on Tuesday.

PremjiInvest, the investment arm of Wipro Ltd chairman Azim Premji, as well as Norway’s Government Pension Fund Global, venture capital firm Volrado Venture Partners and a dozen mutual funds were among the other anchor investors.

Both General Atlantic and GIC had also come in as anchor investors in mortgage lender PNB Housing Finance Ltd in October last year.

D-Mart’s anchor investors also included funds of foreign investors such as JPMorgan, Fidelity, Goldman Sachs, T Rowe Price Asia and private equity firm Acacia Banyan Partners.

Among Indian asset managers, ICICI Prudential Asset Management Co, HDFC Trustee Co, Reliance Capital Trustee Co Ltd, Motilal Oswal Asset Management Co, UTI Asset Management Co and Birla Sun Life Asset Management Co bought shares.

The strong interest from anchor investors gains importance as D-Mart becomes the first multi-line retail company to float an IPO in four years. The last one to go public was V-Mart in 2013. A successful listing of D-Mart could open the window for other peers to test the public market.

Anchor investors are institutional investors who accept a one-month lock-in period for a sizeable allocation of shares and support a public offering. Their participation highlights investors’ confidence in an IPO and sets a benchmark for the investor community at large.

Avenue Supermarts’ IPO begins on Wednesday and closes on Friday. The company is seeking a valuation of as much as Rs 18,660 crore ($2.8 billion). At that valuation, the company would surpass the combined $2.5 billion market capitalisation of four of its well-known peers—Shoppers Stop Ltd, V-Mart Retail Ltd, V2 Retail Ltd and Future Retail Ltd.

The company set a price band of Rs 295-299 a share for the offering. Two grey market dealers told VCCircle that shares of Avenue Supermarts were quoting at a premium of Rs 230-235 apiece above its price band. The grey market is an over-the-counter market where shares are traded before they are listed on a stock exchange.

The IPO will comprise a fresh issue of shares worth Rs 1,870 crore ($280 million). It will sell about 62 million shares, which will see a dilution of an about 10% stake. Avenue Supermarts will use almost 20% of the net proceeds to repay debt and a part of it to open new stores. 

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General Atlantic, GIC among D-Mart anchor investors

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