After a stunning debut on the bourses on March 21, Avenue Supermarts on Monday notched up market capitalisation of Rs 50,000 crore. The stock rose 3.33%, ending the session at Rs 775.50, after hitting Rs 806.80 a share in intra-day trading. The stock had listed at a price of Rs 604.40, a whopping 102% above the issue price. The initial public offering (IPO) of Avenue Supermarts was subscribed 104 times with investors bidding for 463.32 crore shares against 4.43 crore shares on offer.
According to a report by JP Morgan, the company has been able to attract new customers profitably with its low price positioning, sharper product assortment and efficient execution. “We estimate 27% revenue and 34% EPS CAGR over FY17-20 driven by a combination of store additions, healthy SSSG, inflation and modest margin improvement,” JP Morgan wrote.
Avenue Supermarts has reported a CAGR of 40% in revenues over the past four years. JP Morgan estimates the CAGR to be 27% over the next three years owing to store expansion plans of the company, improving consumption trends, and growing shift to modern retail formats.
Pre-IPO, promoters owned 91.3% of the company and directors owned another 3.1%. Post IPO in March, the promoter shareholding has come down to 82.2%, with directors owning another 2.8%. FIIs and DIIs own 2.7% and 2.3%, respectively.
Of the four brokerages which track the stock, two have a ‘buy’ rating while the other two have a ‘hold’ rating, according to Bloomberg data.