D-Mart scrip surges over 100% on market debut

Shares of Avenue Supermarts, the owner of supermarket chain D-Mart, made a strong debut on the exchanges today, surging over 100 per cent on the first day of trading and doubling shareholder wealth in one day.

D-Mart shares surged 117 per cent to Rs648.8 on the first day of trading against the issue price of Rs299 – more than doubling share value for those who could get hold of these shares at the IPO.

The initial public offer of shares of D-Mart, one of the most profitable food and grocery retailers in India, saw huge interest from the investor community.

D-Mart's Rs1,870-crore IPO, the biggest since PNB Housing Finances' Rs 3,000-crore offer in October last year, was subscribed more than 104 times earlier this month. The portion set aside for qualified institutional buyers (QIBs) was oversubscribed 144.6 times and that of non-institutional investors 277.74 times. Retail investors' category was also oversubscribed 7.36 times.

The D-Mart IPO opened for subscription on 8 March and closed on 10 March, with the offer price of shares fixed at Rs295-299. Avenue Supermarts said the proceeds of the issue would be used for various purposes, including repayment of loans.

Incorporated in 2002, Mumbai-based Avenue Supermarts is amongst the largest and the most profitable food and grocery retailer in India. It offers wide range of food and non-food products. D-Mart operates a total of 118 stores.

Retail business in India is expected to grow at a combined annual growth rate (CAGR) of more than 12 per cent over FY2016-20. The share of organised segment is expected to improve from 9 per cent to nearly 12 per cent by fiscal year 2020.

Avenue Supermarts has steadily expanded its business, increasing the number of its stores from 45 in FY2011 to 118 by 31 December 2016. Its net profit has grown from Rs161 crore in FY2014 to Rs319 crore in FY2016 while its sales has grown from Rs4,686 crore to Rs8,588 crore during the period.

In the first nine months of current fiscal, it has reported a net profit of Rs387 crore on sales of Rs8,784 crore.