Avenue Supermarts, which recently concluded its Rs 1,870-crore initial public offering, will list its shares on bourses on Tuesday.
It has Reliance Retail, Future Retail, Trent Hypermarkets and Avenue Supermarts as its major competitors in the market.
The company, founded in 2002, offers a wide range of products with focus on foods and non-foods (FMCG), general merchandise and apparels.
The Radhakrishna Damani led company has 118 stores across nine states and one union territory. Avenue Supermarts operates and manages all its stores predominantly based on an ownership model (including long-term lease arrangements, where the lease period is more than 30 years and the buildings are owned by the company) rather than a rental model.
It also operates distribution and packing centres, which form the backbone of its supply chain and support the retail network.
D-Mart is among the most profitable food and grocery retail chains in India. The firm clocked a profit of Rs 300.21 crore in fiscal 2016 on a revenue of nearly Rs 8,600 crore. Its profit after tax (PAT) rose 50 per cent year-on-year.
Since FY 12, the firm has logged 100 per cent rise in its revenue every two to three years. According to Technopak, in fiscal 2016, D-Mart was the largest and the most profitable F&G retailer in India.
The IPO, the biggest since PNB Housing Finance's Rs 3,000 crore offer in October last year, was subscribed more than 104 times earlier this month.
Last year, Advanced Enzyme's initial share sale was subscribed 116 times and that of Quess Corp by 145 times.
The price band for the public issue of Avenue Supermarts, the operator of retail chain D-Mart, was fixed at Rs 295-299 and the IPO was open for subscription during March 8-10.
Proceeds of the issue would be utilised for various purposes, including loan repayment. The public issue was managed by nine merchant bankers Kotak Mahindra Capital, Axis Capital, Edelweiss Financial Services, HDFC Bank, ICICI Securities, Inga Capital, SBI Capital Markets, JM Financial Institutional Securities and Motilal Oswal Investment Advisors.
Avenue Supermarts raised nearly Rs 561 crore by allotting shares to anchor investors.
Currently, D-Mart operates close to 120 stores, most of them located in Maharashtra and Gujarat.
Nirmal Bang Securities in a note said Avenue Supermarts is a long-term story and should be viewed from 2-3 years point of view. We like the business model of the company given its lean cost, customer centric focus and cluster based ownership model.
KR Choksey said the company has total debt of Rs 12.4 bn at the end of 9MFY17, which is expected to reduce by Rs 10.8 billion over FY18-20. This in turn could result company to stand at almost debt-free level, which could improve return ratios further going ahead. It recommended subscribe to the issue.
YES securities research, Choice Broking and Angel Broking also gave subscribe call to the issue.