Vishal Mega Mart set to debut in Mumbai after $944 million IPO

Vishal Mega Mart Ltd’s shares are set to start trading on Wednesday after raising $944 million in India’s last major new listing of the year.
The sale attracted bids for over 27 times the 756.8 million shares offered at 78 rupees apiece, the top end of the price band, driven by strong demand from high-networth and retail investors. The IPO valued the Gurugram-based company at $4 billion.
The company runs a network of over 600 stores across India, catering to the middle- and lower-income consumers. Its debut comes amid a tough environment, with quick-commerce firms upending traditional brick-and-mortar retailers. Investor sentiment has cooled toward Avenue Supermarts Ltd, the operator of DMart chain and the country’s largest value retailer.
Vishal Mega Mart may still fare better than its rivals, as 75% of its stores are in second-tier cities and smaller towns. “The company’s focus on value pricing is attracting customers,” said Rajan Shinde, an analyst at Mehta Equities Ltd., adding that the valuation — 69 times annualized earnings for the latest fiscal year — is “reasonable” compared to peers trading at 90-100 times.

Vishal Mega Mart derives over half its revenue from general merchandise and fast-moving consumer goods, with apparel accounting for the rest. It reported a profit of 4.6 billion rupees ($54 million) on a revenue of 89.1 billion rupees in the year ended March, according to its IPO document.
The company raised $283 million from anchor investors, including the Singapore government and funds managed by Nomura and Blackrock. The IPO underlined a strong year for India’s equity markets, where over 300 companies have raised almost $18 billion in first-time share sales.
Founder Samayat Services LLP sold shares via the offering, with no fresh capital raised by the company.