Ace stock market investor Radhakishan Damani, who is also the promoter of Avenue Supermarts Ltd, on Friday sold a 1% stake in the company that manages hypermarket chain D-Mart.
Damani sold a little more than 6.23 million Avenue Supermart shares via multiple block deals and open market transactions, the company informed stock exchanges. The buyers’ identity couldn’t be immediately ascertained.
While the company did not provide the details of all the transactions, bulk of the shares were sold at Rs 1,404.10 apiece.
This will fetch Damani about Rs 874.75 crore (around $123.5 million at current exchange rates) before accounting for transactions costs and statutory levies including the 10% long-term capital gains tax that is now applicable.
The stake sale is part of the company's efforts to meet the Securities and Exchange Board of India’s (SEBI) norms which stipulate that promoters and promoter groups can have a maximum of 75% stake in listed entities. These norms may be revised after finance minister Nirmala Sitharaman last month proposed to bring the level of promoter holding to 65%.
The promoter and promoter group holding in Avenue Supermarts will drop to roughly 80.2% after the latest transaction from 81.20% at the end of June. Damani’s personal stake will drop to 37.41%.
In May 2018, Damani had sold a 1% stake in the company to meet the SEBI guidelines. Damani then took home about Rs 848.75 crore (around $125 million then).
Shares of Avenue Supermarts advanced 1.58% on the BSE to close at Rs 1,452.85 apiece.
D-Mart went public through a mega initial public offering in March 2017. The company’s share sale was subscribed 105 times in what was among the most successful IPOs in recent times.
The IPO comprised a fresh issue of shares worth Rs 1,870 crore. Avenue Supermarts used 20% of the net proceeds to repay debt and a part of it to open new stores.
Shares of Avenue Supermarts more than doubled on listing day, making it the best stock market debut in almost a decade.