Vishal Mega Mart planning a $1 billion IPO: Report

Budget supermarket chain, Vishal Mega Mart, is reportedly planning a $1 billion initial public offering. The IPO could value the supermarket chain at up to $5 billion. Some of the proceeds is expected to be earmarked to add more stores. 

According to a report in Reuters that quoted sources, Switzerland's Partners Group and India's Kedaara Capital, which have a majority stake in Vishal Mega Mart, are expected to sell shares in the offering. It is unclear how much stake both the equity firms own in Vishal Mega Mart, or how much they are expected to sell and how much they are expected to retain. Partners Group and Kedaara acquired Vishal Mega Mart for about $350 million in 2018 from rival buyout firms TPG and Shriram Group.

Vishal Mega Mart, whose presence is prominent primarily in smaller cities, has 560 stores that sell clothes and grocery items. 

People in the know told the news agency that investment banks have been invited to pitch for the IPO this week and the offering is expected to take place later in the year.

According to a report by India Ratings, Vishal Mega Mart's revenues jumped 36 per cent to $917 million in its last financial year ended March 2023, while net profit surged 60 per cent. 

Vishal Mega Mart sells a host of items, including apparel, home appliances, luggage, and groceries, at a budgeted price. For instance, one can buy a T-shirt from Vishal Mega Mart for as low as Rs 99, and jeans for under Rs 800. It earns about half of its sales from apparel.  

Reports of Vishal Mega Mart’s IPO comes at a time when the Indian stock markets are trading near record highs and the benchmark NIFTY index has climbed 12 per cent over the last six months. IPO activity is expected to gain pace amid the country’s rapid economic growth and a stable political environment. Prime Minister Narendra Modi is expected to win a third term in the election due in April-May.