Patel Retail Files for IPO with Sebi to Boost Fundraising Efforts

New Delhi, Apr 1 - In a significant move within the retail sector, Patel Retail Ltd has announced its plans to enter the public market with an initial public offering (IPO). The company has submitted preliminary documents to Sebi, outlining a combination of a fresh issue and an offer for sale (OFS) as part of its IPO strategy. The fresh issue involves 90.18 lakh shares, while the OFS will see up to 10.02 lakh shares being sold by promoters.

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The anticipated IPO size is estimated to be between Rs 250 crore and Rs 325 crore, as per sources familiar with the matter. The OFS will include up to 7.68 lakh equity shares sold by Dhanji Raghavji Patel and up to 2.34 lakh equity shares by Bechar Raghavji Patel. Additionally, there will be a special reservation within the offer for eligible employees of the company.

According to the draft red herring prospectus (DRHP) filed, Patel Retail intends to allocate approximately Rs 60 crore from the proceeds for debt repayment. Another Rs 115 crore is earmarked for funding working capital requirements, with a portion also allocated for general corporate purposes.

Since its inception in 2008 with its first store in Ambernath, Maharashtra, Patel Retail has expanded its footprint across Thane and Raigad districts. Catering primarily to tier-III cities and suburban areas under the brand Patels R Mart, the company offers a wide array of products ranging from food and FMCG items to general merchandise and apparel.

As of December 31, 2023, Patel Retail boasts a network of 31 stores. The company positions itself alongside several listed peers in the industry such as Avenue Supermarts Ltd and Spencers Retail Ltd among others.

The financial performance of Patel Retail highlights a robust growth trajectory. For the fiscal year 2023, the company reported a 33% increase in revenue from operations, reaching Rs 1,018.55 crore up from Rs 766.16 crore in the previous year. Profit after tax also saw a significant rise of 44%, amounting to Rs 16.38 crore compared to Rs 11.37 crore in the fiscal year prior.

For the six months ending on September 30, 2023, Patel Retail recorded revenue from operations at Rs 445.98 crore and profit after tax at Rs 9.78 crore.

Fedex Securities Private Limited has been appointed as the sole book-running lead manager for this IPO issue.

This move by Patel Retail Ltd marks a significant step in its growth strategy, aiming to strengthen its financial position and expand its operations further within the competitive retail market.