1. Regret missing D-Mart IPO? ‘Welcome to the club’, says this $10 billion investor

Regret missing D-Mart IPO? ‘Welcome to the club’, says this $10 billion investor

Ashburton Investments, which overseas over $10 billion in assets under management, and is a prominent investor in Infosys too, says that it missed the bus by not investing in D-Mart IPO.

By: | Updated: August 24, 2017 3:59 PM
D-Mart shares continue to reach new all time highs with the stock soaring to Rs 1,019 on Thursday. (Image: Reuters)

D-Mart shares continue to make successive all time highs, with the stock soaring to Rs 1,019 on Thursday morning, and more than tripling the investor wealth in just months since the company’s much-hyped IPO. Yesterday, the stock made its last all-time high of Rs 999. However, it is not all cheer in the markets, as several investors who did not buy shares in its IPO may now be watching with a heavy heart as the stock gallops ahead. Turns out, they are not alone. Renowned institutional investor Ashburton Investments, which is in news for being a prominent investor in Infosys, is also in the same boat.

 

Ashburton Investments, which overseas over $10 billion in assets under management, says that it missed the bus on D-Mart. In an interview with ET Now, Jonathan Schiessl, the chief investment officer at Ashburton Investments, said that he initially felt that the company was overvalued. “We did a lot of work on that and decided to stay away. The valuation just kept us away. Sometimes you just need to bite the bullet,” Jonathan Schiessl said to ET Now.

Billionaire Radhakishan Damani-owned Avenue Supermarts, the company which owns and operates the D-Mart supermarket chain, crossed Rs 60,000 crores market capitalisation on Wednesday. The stock had made a mega entry in the market with a bumper listing pricing of Rs 606 at the NSE as against its issue price of Rs 299 per share on March 21, 2017.  As compared to the listing price of Rs 606, the stocks have registered gains of more than 60%.

Avenue Supermarts had reported a 47.6% year-on-year (YoY) rise in net profit at Rs 174.77 crore for the June quarter. Total income also registered gains of more than 36 per cent. Several analysts had recommended subscribing to issue given the company’s strong financial and operational profile, and its promising growth record over the years.

Radhakishan Damani, promoter of the company is a veteran stock market trader and investor who had been in the Forbes list of wealthiest people. 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.

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 Walmart of the US.

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