Vishal Mega Mart is reportedly planning a USD 1 billion initial public offering (IPO) that would value the company at up to USD 5 billion. The IPO proceeds are intended to fund the addition of new stores, according to sources familiar with the matter as reported by Reuters.
Switzerland’s Partners Group and India’s Kedaara Capital, who collectively hold a majority stake in Vishal Mega Mart, will each divest some shares in the IPO, though specifics regarding their ownership percentages and the extent of their sell-off remain undisclosed.
Vishal Mega Mart’s CEO, Gunender Kapur, did not respond to requests for comment, while Kedaara declined to comment and Partners Group chose not to respond.
The retailer, with 560 stores primarily situated in smaller cities, offers a range of products including clothing and grocery items, competing with established players like Reliance, Trent and Avenue Supermarts.
In the wake of India’s buoyant stock markets and favorable economic conditions, the IPO is anticipated to proceed later this year, with investment banks currently vying for a role in the offering.
Vishal Mega Mart’s financial performance has been robust, with revenues climbing 36 per cent to 75.9 billion rupees (USD 917 million) in the fiscal year ending March 2023. Net profit also surged by 60 per cent to 3.2 billion rupees during the same period, as per a report by India Ratings, a subsidiary of Fitch.
With India’s retail market poised for substantial growth, estimated to reach USD 2 trillion by 2033, Vishal Mega Mart stands to benefit from the ongoing shift from unorganised to organized retail formats.
The company, known for its affordable pricing strategy, derives approximately half of its sales from apparel, alongside other product categories such as home appliances and groceries.
Partners Group and Kedaara Capital acquired Vishal Mega Mart from TPG and India’s Shriram Group for around USD 350 million in 2018.
