Vishal Mega Mart IPO Makes Strong Debut, Shares List at 33% Premium

Vishal Mega Mart listing: For primary markets, the last month of 2024 couldn't have been better. One of the most talked-about IPOs of this year, Vishal Mega Mart made a stellar listing on the Dalal street as the shares of the company surged by over 33 per cent. The stock debuted at Rs 104 price level, as compared to its initial issue price of Rs 78.

At 10:15 am, the shares of the hypermarket retail chain were trading at Rs Rs 110.20, up by more than 40 per cent on the National Stock Exchange.

The company had witnessed robust investor interest during the bidding period as the public offering was subscribed over 27 times. The Rs 8,000 crore initial public offering received a 'Subscribe' rating from many brokerage houses including Anand Rathi and SBI Capital.

Investors placed bids for around 2,064 crore shares, far exceeding the cumulative number of shares available for bidding, which stood at 75.67 crore. The company had a fixed price band of Rs 74-78 per share.

Vishal Mega Mart sells products in three main categories, which are apparels, general merchandise and FMCG. They have 645 stores across the country alongside app-based digital presence. As of FY24, the hyper-local retail chain was one of the top three offline-first retailers in India based on retail space, with significant profit growth from FY 2021 to 2024, as per a report by Anand Rathi.

Vishal Mega Mart Financial Performance

The company's bottom-line has remained robust over the past few years. During FY24, Vishal Mega Mart recorded a profit of Rs 461.94 crore, a sharp surge from Rs 321.27 crore reported in the previous fiscal. As for revenue, the figure stood at Rs 8,945.13 crore in FY24, up from Rs 7,618 crore recorded in FY23.

During the quarter ending September, the company's profit after tax stood at Rs 254 crore. Revenue stood at Rs 5,053 crore during the same period.

While the company received a 'subscribe' rating from most brokerage houses, key risks remain well-present for the hyper local retain chain. For instance, the company is highly dependent on third party vendors for the manufacturing of its product-base.

Plus, given the current demand trends in the country, especially in the FMCG sector, the company might need to pay much more attention to its inventory levels and sales figures. Also, a massive chunk of its revenue comes from states like Uttar Pradesh, Karnataka and Assam.