Patel Retail, a supermarket chain, has initiated the process of raising capital through an initial public offering (IPO) by filing preliminary papers with the capital markets regulator, Sebi. The IPO comprises a combination of a fresh issue of 90.18 lakh shares and an offer for sale (OFS) of up to 10.02 lakh shares of promoters, as outlined in the draft red herring prospectus (DRHP).
According to merchant banking sources familiar with the matter, the IPO size is estimated to be in the range of Rs 250 crore to Rs 325 crore.
The OFS encompasses the sale of equity shares, with Dhanji Raghavji Patel planning to sell up to 7.68 lakh shares and Bechar Raghavji Patel up to 2.34 lakh shares.
Additionally, the offer includes a provision for subscription by eligible employees.
As disclosed in the draft papers submitted on Friday, the proceeds from the fresh issuance amounting to Rs 60 crore will be allocated towards debt repayment, Rs 115 crore for fulfilling working capital requirements, and the remaining portion for general corporate purposes.
Established in 2008, Patel Retail inaugurated its first store in Ambernath, Maharashtra, and has since expanded its presence across suburban regions including Thane and the Raigad district in Maharashtra. The company offers a diverse array of products such as food, non-food items (FMCG), general merchandise, and apparel, catering to the needs of families. Operating primarily in tier-III cities and nearby suburban areas, it operates under the brand “Patel’s R Mart”.
As of December 31, 2023, the company managed and operated 31 stores.
Patel Retail draws comparisons with various listed industry peers, including Avenue Supermarts, Spencers Retail, Osia Hyper Retail, Aditya Consumer Marketing, Sheetal Universal, Kovilpatti Lakshmi Roller Flour Mills, KN Agri Resources and Madhusudhan Masala.
During the fiscal year 2023, the company witnessed a 33 per cent increase in revenue from operations, reaching Rs 1,018.55 crore compared to Rs 766.16 crore in the previous year.
Furthermore, the profit after tax recorded a growth of 44 per cent to Rs 16.38 crore in the financial year 2023 from Rs 11.37 crore in the preceding fiscal. For the six months ended 30 September 2023, revenue from operations amounted to Rs 445.98 crore, with a profit after tax of Rs 9.78 crore.
Fedex Securities Private Limited has been appointed as the sole book-running lead manager to the issue.
