Shares of Avenue Supermarts, the operator of supermarket retail chain D-Mart, on Tuesday, made a bumper debut on BSE, as its shares got listed at Rs 604.40, up 102 percent over the issue price of Rs 299. It later soared
105.68 per cent to Rs 616.25. At NSE, shares of the company opened at Rs 600, up 100 percent. D-Mart market cap currently is at 37,000 crore which is higher than that of Idea, IndiGo, and PNB. The operator of supermarket chain DMart was subscribed by over 104 times earlier this month. The IPO was the biggest since PNB Housing Finance’s Rs 3,000 crore offer in October last year.
D-Mart, India’s most profitable supermarket chain, is looking to raise the money to retire part of its debt, a redemption of non-convertible debentures, purchase of fit-outs for new stores and general corporate purposes. The company is promoted by Radhakishan Damani, the veteran stock market trader and investor who had been on the Forbes list of wealthiest people. Damani and his family own 91.34% equity stake in Avenue Supermarts (pre-issue).
D-Mart has a strong presence in Maharashtra and Gujarat, and also operates stores in Telangana, Karnataka, Andhra Pradesh, Madhya Pradesh, Chhattisgarh, NCR, Daman, and Rajasthan.
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Most analysts have praised the company’s business model, and hence the growth it offers to the investors. The company maintains low-cost operations, owns the stores rather than renting them and thus saving on rental costs, keeps improving product assortment based on its own data analytics, and seems to saturate the territory and then achieve profitability. Analysts say it follows the same business approach as Wal Mart of the US.