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Vishal Mega Mart, a fashion-focused hypermarket chain backed by Kedaara Capital and Partners Group, operates a pan-India network offering apparel, general merchandise, and fast-moving consumer goods. Vishal Mega Mart IPO is set to raise Rs 8,000.00 crores. The issue is entirely an offer for sale 

About Vishal Mega Mart:

• Vishal Mega Mart, a prominent name in the Indian retail industry, traces its roots back to the early 2000s.
• It was founded by Ram Chandra Agarwal and the company started as a small-scale retail operation, primarily focusing on apparel.
• Today, Vishal Mega Mart operates a vast network of stores across India. Its business model revolves around offering a diverse range of products, including:
  • Apparel: A wide variety of clothing for men, women, and children, encompassing casual wear, formal wear, and traditional attire.
  • General Merchandise: Home appliances, electronics, and other household items.
  • FMCG Products: A comprehensive selection of fast-moving consumer goods, including food, beverages, and personal care products.
• Company has established a pan-India omnichannel network that comprises its (i) offline channel through its physical store network, and (ii) online channel through the Vishal Mega Mart website and mobile application, which are operated by the company’s wholly owned Material Subsidiary.

Financials :Vishal Mega Mart IPO

Anchor: Vishal Mega Mart IPO

Vishal Mega Mart Raised Rs 2,400 Crore From Anchor Investors. Eighteen domestic mutual funds applied through a total of 44 schemes. SBI Multicap Fund, Axis Elss Tax Saver Fun, HDFC Small Cap Fund, ICICI Prudential Flexicap Fund and ICICI Prudential Innovation Fund were among the top fund houses in this category.

Salient Points: Vishal Mega Mart IPO

• The aspirational retail market in India, driven by the consumer desire for products that offer both high-quality and affordability, will remain a significant contributor to India’s retail market as per RedSeer Report. The total addressable market for aspirational retail in India is Rs. 68-72 trillion (US$820-870 billion) for Calendar Year 2023, and is expected to be Rs. 104-112 trillion (US$1,250-1,350 billion) by Calendar Year 2028, growing at a CAGR of 9%.
• The proposed IPO is entirely an OFS by promoter Samayat Services LLP, Currently, Samayat Services LLP holds 96.55 per cent stake. 
• Vishal Mega Mart is the fastest-growing leading offline-first diversified retailers in India, based on PAT growth between FY 2021 – 2024, and among the 2 leading offline-first diversified retailers in India in terms of same-store sales growth for FY 2024.
• Vishal Mega Mart operates 646 hyper-market format stores. Out of these stores 70% are located in tier 2 and beyond towns. Thus its targets middle income group .
• Average order value is ~Rs. 950.
• The company’s loyalty program was awarded the “Best Loyalty Programme of the Year Food Retail and Non-Food Retail” at the International Loyalty Awards 2023.
• Company has 133.82 million customers registered under the loyalty program as at September 30, 2024.
• Peers

• The retail sector in India is growing rapidly, and Vishal Mega Mart is well-positioned to capitalize on this growth.
• The company has a strong and experienced management team with a proven track record of success.
• Vishal Mega Mart offers a wide range of products, which helps to attract a diverse customer base.
• The company has a strong brand presence in India, which helps to attract customers.
• The company’s average payback per store for new stores opened during FY 2023 was 19 months, which is the shortest store payback period among leading offline- first diversified retailers in India.
• Vishal Mega Mart held the leadership in opening price points across several product categories in apparel, FMCG & general merchandise as of April 30, 2024.
• An encouraging sign is that share of private label rose to 73% of revenue in H1FY25, up from 70% in FY23.
• It has 13% same store sales growth (SSSG), higher than Dmart.
• The company’s revenue from operations from sales of own brands grew at a CAGR of 27.72% between FY2022-2024.
• Their topline doubled in past 3 years and net profit almost tripled since FY22.
• Promoters Kedaara Capital and Partners Group are making an IRR of 35% based on their investments in 2018.
• PE 67x ( annualized ), PE FY24 75x .
• On flip side there is risk from e-commerce.
• I intend to apply in Vishal Mega Mart IPO. It has a good track record of delivering revenue and profit growth and ensuring capital efficiency. It compares well with its peers. Its focus on Tier 1 & 2 cities should shield it from loosing market share to e-commerce.
• GMP as reported in media is 17 (21%).
• This post is exploratory and educational purposes only.
• Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.