D-mart all set for IPO of its Avenue Supermarket

Avenue Supermarts Ltd has filed its draft red herring prospectus (DRHP) with the capital
markets regulator SEBI to float its initial public offering. Avenue Supermarket runs
hypermarkets and supermarkets under the D-Mart brand. The recent IPOs have been of
ICICI Prudential Life.
The planned offering is a fresh issue of shares by the company to raise up to Rs 1,870
crore. The company will employ almost three-fifths of the net proceeds to pay off debt and
part of the money to open new stores.
D-Mart is the foremost multi-line retail company to propose an IPO in almost a decade.
Although some specialty offline retailers like jewelers and e-commerce firm Infibeam
went public in the past two years, the last multi-line offline retailer to go public was V2
Retail in 2007. A successful listing of D-Mart could pave the way for other peers to test
the public market.

Snapshot of D-Mart Issue:

Issue size: Rs 1,870 crore.
Bankers: Kotak Mahindra Capital, Axis Capital, Edelweiss, HDFC Bank, ICICI
Securities, Inga Capital, JM Financial, Motilal Oswal and SBI Capital Markets.
Objects of the issue: The company will make use of Rs 1,080 crore of the net proceeds
for repayment or advance payment of a part of loans and redemption or earlier redemption
of non-convertible debentures availed by the retail chain. In addition, nearly Rs 367 crore
will be used for setting up new stores.
Company View:
Incorporated in 2000, D-Mart sells products including foods, toiletries, garments,
kitchenware, bed and bath linen, toys and games, stationery, home appliances and
footwear. It has 112 stores spread across in 41 cities of Maharashtra, Gujarat, Telangana,
Andhra Pradesh, Karnataka, Madhya Pradesh, Chhattisgarh and the national capital region,

according to its website. As of 15 September 2016, it had 21 distribution centers and six
packing centers in Maharashtra, Gujarat, Telangana and Karnataka.
The foods category seems to be the major revenue generator for the company. The
category includes items such as staples, groceries, fruits and vegetables, snacks and
processed foods, dairy and frozen products, beverages and confectionery contributes 53%
to net sales during 2015-16.
Financials:
The companys consolidated net revenue hiked 33% in the year through March 2016 to Rs
8,588.12 crore from Rs 6,439.43 crore the year before. Net profit went up by 51% to Rs
321.2 crore to Rs 211.7 crore.
Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways are solely the
personal views of the research team. Users are advised to use the data for the purpose of information and rely on their
own judgment while making investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022

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Associates/ Research Analyst/ his Relative:

Do not have any financial interest / any actual/beneficial ownership in the subject company.
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Article Written by
Tanaya Nath