Retail chain D-Mart eyes $2.8 bn valuation in IPO
Photo Credit: Mukul Mudgal/VCCircle

Avenue Supermarts Ltd, which runs hypermarkets under the D-Mart brand, is seeking a valuation of as much as Rs 18,660 crore ($2.8 billion) in an initial public offering that begins next week.

At this targeted 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.

Avenue Supermarts has set a price band of Rs 295-299 a share for the IPO, it said in a public notice on Wednesday.

Two grey market dealers told VCCircle that shares of the company were quoting around Rs 480-490 apiece, a premium of 60% over its issue price. The shares were quoting around Rs 450 apiece last week.

The grey market is an over-the-counter market where shares are traded before they are listed on a stock exchange.

The public offering will comprise a fresh issue of shares worth Rs 1,870 crore ($280 million). The company will use almost 20% of the net proceeds to repay debt and a part of it to open new stores.

The company will sell about 62 million shares, which will see a dilution of an about 10% stake.

The IPO begins on 8 March and closes on 11 March. The anchor book will open on 7 March. Anchor investors are institutional investors who accept a one-month lock-in period for a sizeable allocation of shares and support a public offering.

D-Mart is the first multi-line retail company to float an IPO in almost a decade. The last one to go public was V2 Retail (Vishal Retail) in 2007. A successful listing of D-Mart could open the window for other peers to test the public market.

VCCircle had first reported in September 2016 that D-Mart selected Kotak Mahindra Capital Co Ltd as the lead banker for the IPO.

For more details on the IPO, click here.

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