Avenue Supermarts, which owns the retail chain D-Mart, is expected to file its red herring draft prospectus (DRHP) with markets regulator Sebi, according to Kotak Securities.
Avenue Supermarts, which owns the retail chain D-Mart, is expected to file its red herring draft prospectus (DRHP) with markets regulator Sebi, according to Kotak Securities. The initial public offering (IPO) document, as provided by Kotak Securities, is expected to raise R1,870 crore. Of the total amount raised through the issue, R1,080 crore would be used in repayment or prepayment of a portion of its loans and for redemption or earlier redemption of NCDs availed by the company. Close to R366 crore would be used for construction and purchase of new stores and the rest for general corporate purposes.
According to guidelines put out by the Securities and Exchange Board of India (Sebi), 50% of the shares are reserved for qualified institutional buyers (QIB) category, 15% for high net-worth individuals (HNIs) and 35% for retail investors. Up to 60% of the QIB portion has been reserved for anchor investors and one-third of the anchor investor portion has been reserved for domestic mutual funds. Five per cent of the QIB category, excluding the anchor investor portion, has been reserved for mutual funds on a discretionary basis.
For the year ending March 2016, the company reported a 52% increase in its net profit at R321 crore. Revenues during the same period grew by 33% at R8,606 core. Total expenses were reported at R8,113 crore, up 32% from previous year’s R6,134 crore. The company opened its first store in Mumbai in 2002 and as on September 15, 2016 owns 112 retail stores across 8 states. For Fiscal 2016, sales from the state of Maharashtra accounted to almost 63% of the total sales followed by Gujarat and Telangana at 18.83% and 10.15% respectively.
Market veteran Radhakishan Damani is one of the promoters of the company. Kotak Mahindra Capital, Axis Capital, Edelweiss Financial Services, HDFC Bank, ICICI Securities, JM Financial Institutional Securities, Inga Capital Private , Motilal Oswal Investment Advisors , SBI Capital Markets Global co-ordinator and book running lead managers to the issue.