Avenue Supermarts Limited which runs the famous retail chain store D-Mart, is planning to raise around Rs.1,870 crore through its IPO. The Avenue Supermarts Limited IPO or Dmart IPO is expected to hit the market in the last week of February 2017. This IPO in the country’s retail sector is coming after considerable gap and is prompted by Radhakishan Damani, who is considered an ace investor himself.
About the Company
Avenue Supermarts Ltd. (ASL) owns & operates a supermarket chain of D-Mart stores. D-Mart is a one-stop supermarket chain that offers customers a wide range of basic home and personal products under one roof. DMart stores focus is on home utility products – including food, toiletries, beauty products, garments, kitchenware, bed and bath linen, home appliances. Its business approach is to retail quality goods at competitive prices and majority of products stocked are everyday products forming part of basic rather than discretionary spending. Food items account for a little over 50% of the sales of the retail chain
DMart opened its first store in Powai in 2002. As of September 15, 2016, it had 112 stores with Retail Business Area of 3.40 million sq.ft, located across 41 cities in Maharashtra (58), Gujarat (26), Telangana (13), Karnataka (7), Andhra Pradesh (3), Madhya Pradesh (3), Chhattisgarh (1) and NCR (1). The brands D Mart, D Mart Minimax, D-Mart Premia, D Homes, Dutch Harbour, etc are brands owned by ASL
Expected Price ASL (Dmart) IPO
| Equity before issue |
561.543 crore |
| FV |
10 |
| Amount being Raised |
1870 crore |
| Expected Valuation of Company |
18000 crore |
| Expected IPO price for this valuation |
287 |
| Expected Fresh equity |
65.16 crore |
Peer Analysis
This is only a very preliminary peer analysis & shall soon be updated with more peers and more data in due course.
| |
|
|
Figures in Rs. Crore |
| Particulars |
Dstar |
Trent |
Future Retail * |
| Revenue from Operations |
8,588.12 |
2494.16 |
9751.89 |
| Total Revenue (A) |
8,606.11 |
2593.05 |
10087.03 |
| Total Expenses (B) |
8,113.89 |
2376.38 |
8956.86 |
| Profit / (Loss) before Taxation (A-B) (C) |
492.22 |
103.44 |
54.93 |
| Net Profit/(Loss) as Restated |
321.21 |
62.94 |
28.33 |
| Net Profit Margin |
3.74% |
2.52% |
0.29% |
| Equity |
561.50 |
33.23 |
94.27 |
| FV |
10.00 |
1.00 |
2.00 |
| EPS |
5.72 |
1.89 |
0.60 |
| Approx Price /Market Priice |
299 |
257.40 |
258.00 |
| PE |
52.27 |
135.90 |
_ |
| |
|
|
|
| EPS Annualized on Q3FY17 |
|
4.48 |
8.58 |
| PE ( on above EPS) |
|
57.46 |
30.07 |
| Net ProfitMargin (Q3Fy17) |
|
8.65% |
2.34% |
| Return on Net Worth |
21.13% |
4.38% |
0.78% |
| NAV |
26.92 |
432.75 |
39.76 |
* Bharti Retail was merged with Future Retail. The combined entity was further demerged into two companies—the one on the front-end retained the name Future Retail and back end retained the name Future Enterprises.
Financials of ASL (Dmart)
| Particulars |
For the year ended |
| March 31, |
March 31, |
March 31, |
March 31, |
March 31, |
| 2016 |
2015 |
2014 |
2013 |
2012 |
| Revenue |
|
|
|
|
in Rs. Millions |
| Revenue from Operations |
85,881.19 |
64,394.33 |
46,864.88 |
33,408.54 |
22,085.60 |
| Other Income |
179.86 |
182.56 |
158.37 |
142.5 |
138.49 |
| |
|
|
|
|
|
| Total Revenue (A) |
86,061.05 |
64,576.89 |
47,023.25 |
33,551.04 |
22,224.09 |
| |
|
|
|
|
|
| Expenses |
|
|
|
|
|
| Purchase of stock-in-trade |
74,398.53 |
56,484.73 |
40,865.32 |
29,379.25 |
19,567.71 |
| Changes in inventory of stock in trade |
-1,320.79 |
-1,612.80 |
-1,021.04 |
-804.89 |
-728.14 |
| Employee benefit expenses |
1,486.06 |
1,340.62 |
873.37 |
686.65 |
453.12 |
| Other Operational Costs |
3,086.17 |
2,333.95 |
1,810.60 |
1,273.96 |
836.51 |
| Finance Costs |
908.24 |
723.61 |
556.76 |
425.85 |
260.19 |
| Depreciation and amortisation |
984.29 |
815.41 |
570.13 |
457.86 |
374.66 |
| Other expenses |
1,596.38 |
1,257.91 |
918.87 |
723.48 |
576.13 |
| |
|
|
|
|
|
| Total Expenses (B) |
81,138.88 |
61,343.43 |
44,574.01 |
32,142.16 |
21,340.18 |
| |
|
|
|
|
|
| Profit / (Loss) before Taxation (A-B) (C) |
4,922.17 |
3,233.46 |
2,449.24 |
1,408.88 |
883.91 |
| |
|
|
|
|
|
| Tax Expenses |
|
|
|
|
|
| Current Tax |
1,620.90 |
1,064.98 |
770.85 |
401.5 |
257.83 |
| Deferred Tax charge |
93.98 |
44.22 |
64.32 |
70.48 |
23.87 |
| Tax in respect of earlier years |
1.32 |
– |
-0.18 |
– |
0.66 |
| Total (D) |
1,716.20 |
1,109.20 |
834.99 |
471.98 |
282.36 |
| |
|
|
|
|
|
| Net Profit/(Loss) after taxation (C-D) (E) |
3,205.97 |
2,124.26 |
1,614.25 |
936.9 |
601.55 |
| |
|
|
|
|
|
| Net Profit / (Loss) Before Restatement Adjustments |
3,205.97 |
2,124.26 |
1,614.25 |
936.9 |
601.55 |
| Material Restatement Adjustments(F) |
6.82 |
-6.99 |
-0.72 |
2.5 |
3.39 |
| Deferred Tax adjustments(G) |
0.46 |
0.06 |
0.19 |
-0.85 |
-0.88 |
| Net Profit/(Loss) before the adjustments on account of changes in accounting policies (E+F+G) |
3,213.25 |
2,117.33 |
1,613.72 |
938.55 |
604.06 |
| Adjustments on account of changes in accounting policies |
– |
– |
– |
– |
– |
| Net Profit/(Loss) before Minority Interest and Share in Net Loss of Associates |
3,213.25 |
2,117.33 |
1,613.72 |
938.55 |
604.06 |
| Minority Interest |
0.46 |
0.44 |
– |
– |
– |
| Share in Net Loss of Associates |
0.72 |
– |
– |
– |
– |
| Net Profit/(Loss) as Restated |
3,212.07 |
2,116.89 |
1,613.72 |
938.55 |
604.06 |
| Equity before issue |
5615.43 |
|
|
|
|
| FV |
10 |
|
|
|
|
| Amount being Raised |
18700 |
|
|
|
|
| Expected Valuation of Company |
180000 |
|
|
|
|
| Expected IPO price on above Valuation |
287 |
|
|
|
|
| Expected Fresh equity |
651.57 |
|
|
|
|
| Equity post Issue |
6267 |
|
|
|
|
| EPS on Post Issue Equity |
5.13 |
|
|
|
|
| PE on Post Issue Equity |
55.95 |
|
|
|
|
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