New Delhi: Vishal Mega Mart, a budget supermarket chain in India, is reportedly planning an initial public offering (IPO) worth $1 billion. This IPO could potentially value the company at up to $5 billion, with a portion of the proceeds intended for expanding its store network. The majority of stakeholders, Switzerland’s Partners Group and India’s Kedaara Capital are expected to sell shares in the offering, although specific details regarding their ownership stakes and the extent of their sell-off remain undisclosed.
Vishal Mega Mart’s CEO, Gunender Kapur, and the private equity firms involved declined to comment on the matter. The retailer currently operates 560 stores, primarily located in smaller cities, offering a range of products, including clothing, groceries, home appliances, and luggage. Its competitors include prominent names like Reliance, Trent, and Avenue Supermarts.
The IPO plans coincide with a bullish period in Indian stock markets and an optimistic economic outlook, with expectations of increased IPO activity fueled by favorable political stability under Prime Minister Narendra Modi. Vishal Mega Mart has reported robust financial performance, with revenues reaching 75.9 billion rupees and net profit surging to 3.2 billion rupees in the last financial year.
Despite the growing presence of e-commerce platforms, brick-and-mortar retail continues to dominate India’s retail landscape. Vishal Mega Mart’s business model, offering affordable apparel starting from 99 rupees, resonates well with consumers, contributing to its strong sales performance.
Partners Group and Kedaara Capital acquired Vishal Mega Mart in 2018 for approximately $350 million from TPG and India’s Shriram Group. With an optimistic outlook for the Indian retail market, Vishal Mega Mart’s IPO could attract significant investor interest as it seeks to capitalize on its established presence and further expand its footprint in the burgeoning retail sector.
