The investors who got an allotment of D-Mart shares seem to be lucky. Their investment was more than just double. The shares of D-Mart went up to 106% in one day from the issue price of Rs. 299 to Rs. 616.25. D-Mart’s Initial Public Offering is Rs. 1870 crore which is the largest after the Rs. 3000 crore offer of PNB Housing Finances, last year in October. According to the reports, the serving for the Qualified Institutional Buyers was oversubscribed 144.6 times while it was 277.74 times for the Non-Institutional Investors. The set for Retail Investors was oversubscribed 7.36 times.
Rs. 295-299 was the fixed price limit for the public issue of Avenue Supermarts which is the operative of D-Mart. The Initial Public Offering was open for subscription from March 8 to 10. The earnings from the issue would be used in different drives such as loan repayment.
Avenue Supermarts in Mumbai happens to be one of the most lucrative groceries and food retailers in India. There are about 118 stores that D-Mart runs. There are both food and other products available.
A Compound Annual Growth Rate of 12% is probably over the financial year 2016-2020. The organized section would probably grow more than the unorganized section. A rise of 3% is expected in the share of organized players which will go up from 9% to 12%.
Analysts like Kaustubh Pawaskar from Sharekhan was not surprised about the listing of D-Mart shares. He said that D-Mart’s performance was outstanding. The retail chain has developed steadily in the last five years in terms of finance.
The analysts believe that D-Mart will continue to show such growth in future also.
The store count of Avenue Supermarts has gone up from 45 to 118 on December 31, 2016. There were 41 stores in FY 2011 that Avenue Supermarts had which had risen to 118 by December 31, 2016. Avenue Supermarts has successfully maintained their strategy of profit which has proved beneficial for them. The net profit which was Rs 161 crore in FY 2014 went up to Rs. 319 crore in FY 2016. Their sales have boosted from Rs. 4,686 crore to a massive Rs. 8,588 crore in the same period.
ICICI Securities, Kotak Mahindra Capital, JM Financial Institutional Securities, Axis Capital, MotilalOswal Investment, SBI Capital Markets, HDFC Bank, Kotak Mahindra Capital and Edelweiss Financial Services take care of the public issue for D-Mart.