Vishal Mega Mart IPO: Date, Price, Allotment, GMP Listing Details; Is It Worth Buying The IPO?

Vishal Mega Mart IPO: The whopping Rs 8,000 crore IPO is all set to open for bidding on Wednesday, December 11, 2024. Accordingly, the subscription window for anchor investors is open on December 10. The latest grey market premium (GMP) is signalling a double-digit percentage listing for Vishal Mega Mart IPO. The company has fixed its price band as well. Brokerage Choice Broking has recommended subscribing to the IPO for the long term.

Vishal Mega Mart IPO:

The IPO is a 100% book building and will open on December 11. The bidding will close on December 13. The price band for the IPO is fixed at Rs 74 to Rs 78 per share. While the bid lot size is 190 Equity Shares and in multiples thereof. The IPO is an entirely offer for sale (OFS) worth Rs 8,000 crore.

The promoter & promoter group and the non-promoter & non-public are participating in the OFS and offloading 102.56 - 108.11 crore of shares. Post-IPO, the P&PG and public shareholders will have 76.02% and 23.98% stake in the company, respectively.

Since the IPO is an OFS, Vishal Mega Mart cannot utilise the proceeds and will be given to selling shareholders.

Vishal Mega Mart IPO GMP Today:

As per Investor Grain, Vishal Mega Mart IPO's last GMP is ₹25, last updated Dec 10th 2024 11:28 AM. With a price band of 78.00, Vishal Mega Mart IPO's estimated listing price is ₹103 (cap price + today's GMP). The expected percentage gain/loss per share is 32.05%.

Vishal Mega Mart IPO Allotment:

After the IPO, the basis of allotment is expected to be carried out on December 16 by Vishal Mega Mart. This will follow the initiation of refunds and credit of shares to eligible investors' demat accounts on December 17, 2024.

Vishal Mega Mart IPO Listing:

Tentatively, the IPO is expected to be listed on December 18 on the stock exchanges BSE and NSE.

Vishal Mega Mart IPO Subscribe Or Not?

According to Choice Broking, Vishal Mega Mart is a one-stop destination that serves middle and lower-middle-income consumers in India, offering a curated range of apparel, general merchandise, and FMCG products through 645 stores nationwide. The store features both own and third-party brands to meet everyday and aspirational needs. Majority of the company's revenue comes from their own brand (70%). As of FY24, the company holds a major portion of its stores in north India followed by east India and has plans of expanding in the west and south India. Over the years, the company's top and bottom lines have been steadily increasing. The company's main target is Tire-2 cities which are expected to grow its diversified retail sector at a 32% CAGR between CY23 and CY28.

Further, Choice Broking's note said, "At the higher price range, VMM is demanding an EV/Sales multiple of 3.8x, which seems to be fully priced. However, the company has seen a steady growth in its top and bottom line because of the increase in number of stores and also because of its own brand sales which positively impacts the margins. Over the years, the company has shown a good hold in its inventory and working capital management, which gives a sustainable outlook for long term. Thus, we recommend an "Subscribe For Long Term" rating for this issue."

Here are key risks and strengths of Vishal Mega Mart IPO highlighted by Choice Broking:

Competitive Strengths:

- Serving a Large and Growing Section of the Indian Population

- Consumer-Centric Approach Resulting in a Large and Loyal Consumer Base

- Diverse and Growing Portfolio of Own Brands across Product Categories

- Pan-India Presence with a Track Record of Successful Store Growth

- Technology Enabled and Systems Driven Operations

- Professional and Experienced Management Team

- Track Record of Delivering Revenue, Profit Growth and Capital Efficiency

Risks:

- General slowdown in the global economic activities

- Dependency on third-party vendors for manufacturing products sold in its stores

- Changing consumer preferences

- Revenue concentration from stores in Uttar Pradesh, Karnataka, and Assam.

Vishal Mega Mart Ltd. (VMM), is a one-stop destination for middle and lower-middle-income consumers in India, offering a curated selection of products across apparel, general merchandise, and FMCG.