Vishal Mega Mart stock in focus as promoter likely to sell up to Rs 9,896 crore shares

Shares of Vishal Mega Mart Ltd are in focus on Tuesday morning as promoter Samayat Services likely upped the block deal size and may sell a whopping Rs 9,896 crore worth of shares now, CNBC TV 18 reported. Earlier media reports suggested that the Vishal Mega Mart promoter was likely to sell 10 per cent stake via Rs 5,057-crore block deals. 
The floor price is reportedly been set at Rs 110 per share, a 11.9 per cent discount to the last closing price. Kotak Mahindra Capital and Morgan Stanley are said to be the advisors for the proposed block trade.
Vishal Mega Mart shares rose 11.68 per cent in the past six months. The stock is up 18 per cent year-to-date. 

In FY25, the four listed value retailers —(Vishal Mega Mart, V-Mart, Style Bazaar, V2 Retail) —posted combined revenue growth of 24 per cent, supported by 16 per centg retail area addition and healthy double-digit same-store sales growth (SSSG). V2 Retail (V2REL) stood out with 60 per cent store area additions and 29 per cent SSSG (against 12-13 per cent for other listed peers).

In a note on fashion retailers, MOFSL on Monday said margin profile of value retailers improved, as FY25 blended gross margins for listed companies expanded 50 bps YoY to 29 per cent. This was against 150 bps improvement in Q4, reflecting an improved product mix, higher MRP sales and procurement efficiencies. 

"Vishal Mega Mart (VMM) saw the highest gross margin expansion of 80 bps YoY in FY25 (180 bps YoY in 4Q), driven by rising share of private-label brands. Pre-IND AS Ebitda margin expanded by 180 bps YoY to 8.2 per cent, the highest in recent years, driven by improved sourcing (private label mix, vendor consolidation), operating leverage benefits, and better inventory turns," MOFSL said.

MOFSL said Pre-IND AS operating cash flows improved sharply to Rs 1000 crore against Rs 400 crore YoY. Despite aggressive store expansion, free cash flow also improved. "However, this recovery was skewed, with Vishal Mega Mart accounting for 60 per cent of sector revenue and the majority of profit and cash generation," MOFSL said.

MOFSL said in 4QFY25, pre-INDAS Ebitda margins expanded 230 bps YoY to 6.1 per cent, despite a 40 per cent YoY increase in employee costs.