Ever since the physical movement of goods has resumed post the Covid -era, the retail customer has been asking for choice. This has led to a burst of demand in various formats with in-house shopping taking the cake. Vishalmart has been riding the high of this demand and is coming out with its IPO.
Vishal Mega Mart IPO Launches December 11
Vishal Mega Mart’s journey began as a humble retail store, and today it is one of India’s largest value retail chains, with 645 outlets across major Tier 1, Tier 2, and Tier 3 cities. The brand’s USP is “the most affordable deals,” tailored for all types of customers—whether it’s fashion, home essentials, or groceries.
Their target audience is middle and lower-middle-income households, which are growing rapidly in number. They focus on four key factors: Variety, Affordability, Quality, and Convenience.
History
Vishal Mega Mart, one of India’s pioneering retail chains, began its journey in 1986 as Vishal Garments, a small clothing store in Kolkata. Its founder, Ram Chandra Agarwal, envisioned providing affordable fashion to middle and lower-middle-income households. Over time, the company expanded its scope, rebranding as Vishal Retail Limited and diversifying into general retail, offering products across categories like apparel, home essentials, groceries, and more.
Objective
The name “Vishal Mega Mart” reflects the brand’s core values and mission:
- “Vishal” translates to “vast” or “grand” in Hindi, signifying the large-scale operations, extensive variety, and ambitious vision of the brand.
- “Mega Mart” highlights its positioning as a comprehensive, one-stop retail destination offering a wide range of products under one roof, from groceries to apparel and home essentials.
Vishalmart today
Today, Vishal Mega Mart stands as one of India’s leading value retail chains, operating over 645 stores across Tier 1, Tier 2, and Tier 3 cities. Renowned for its “sabse saste deals” (most affordable deals), the brand caters primarily to middle and lower-middle-income households, offering a diverse range of products, including fashion, groceries, and home essentials. With a focus on Variety, Affordability, Quality, and Convenience, Vishal Mega Mart addresses the evolving needs of budget-conscious shoppers. Its expansive network and customer-centric approach have made it a trusted name, serving millions while capitalizing on India’s growing consumer base.
Vishal Megamart’s financials
(Amount in ₹ crores)
| Particulars | 2024 | 2023 | 2022 |
| Revenue from Operations | 8945.12 | 7618.89 | 5653.85 |
| Expenses | 8324.17 | 7188.3 | 5384.20 |
| Net Profit | 461.9 | 321.2 | 202.7 |
| Earnings per share (EPS) | 1.02 | 0.71 | 0.45 |
| EBITDA | 1248.6 | 1020.5 | 803.6 |
Source:Vishal Mega Mart RHP
Vishal Megamart’s IPO details
| Particulars | Details |
| IPO start date | December 11, 2024 |
| IPO end date | December 13, 2024 |
| Price band | 74 – 78 |
| Lot size | 190 |
| Face value | 10 |
| Total Issue | 8000 crore |
| Fresh Issue | 0 |
Source: Vishal Mega Mart RHP
Shareholding pattern
The shareholders of Vishal Mega Mart primarily consist of private equity firms and strategic investors, as the company is not publicly listed. Here’s an overview:
| Name of shareholder | Shareholding (%) |
|---|---|
| Samayat Services LLP | 96.46% |
| Gunender Kapur | 2.44% |
| Other Investors | 1.1% |
Source: Vishal Mega Mart RHP
Fund utilisation plan
Since this IPO is structured as an offer-for-sale (OFS) rather than a fresh issue, the proceeds raised will not be injected into the company’s operations or growth plans. Instead, the entire amount will be directed to the selling promoter shareholder, Samayat Services LLP, as they are divesting their stake in the company.
This structure implies that the company will not benefit financially from the IPO in terms of acquiring funds for expansion, reducing debt, or investing in new projects. The primary objective of such an IPO is to provide an exit strategy for existing investors rather than raise capital for the business.
While this allows the promoters to realise their investment, it limits the company’s ability to leverage the IPO proceeds for strategic initiatives, such as store expansion, technology upgrades, or working capital enhancement.
Should you invest in Vishalmart’s IPO?
One of the advantages of investing in the IPO is that the company has a big pan-india presence.
Here is why you should consider investing
- Supported by Partners Group and Kedaara Capital, Vishal Mega Mart benefits from financial flexibility and expertise in global retail markets. CEO Gunender Kapoor, with 41 years of retail experience, leads a skilled team driving growth and efficiency.
- Focusing on Variety, Affordability, Quality, and Convenience, the brand meets the needs of middle and lower-middle-income households, building trust and strong customer loyalty.
- With a strong presence in the under-penetrated value retail market, the company is expanding to serve India’s growing aspirational middle class and rising disposable incomes.
- Vishal Mega Mart consistently grows revenue and profits, supported by high-quality products and customer trust, ensuring a solid foundation for future expansion.
Watch out for the below
- Vishal Mega Mart outsources the manufacturing of its private-label products to 781 vendors. While the company monitors and guides the process, this creates dependency on vendors for product quality, specifications, and design standards. This reliance increases the risk of production delays and supply chain disruptions.
- Like other retail businesses, Vishal Mega Mart is sensitive to economic fluctuations. During economic downturns or inflation, reduced consumer spending on non-essential items impacts sales. Since the company primarily serves middle and lower-income segments, any dip in consumer confidence or purchasing power can significantly affect sales.
- Vishal Mega Mart faces intense competition from local and national players like D-Mart, Trent Limited, and e-commerce giants. With more players entering the organised retail space, it becomes increasingly difficult to differentiate in terms of pricing, variety, and customer experience. The rise of online shopping also puts pressure on margins, requiring constant innovation.
- Poor inventory management can negatively impact the company’s financials. Vishal Mega Mart has reduced its inventory days from 71 to 60 between FY 2022 and 2024, indicating changes in sales mix. Excess inventory, especially in the apparel category, can lead to obsolescence, while low inventory of fast-moving consumer goods risks stockouts. Mismanagement can lead to discounted sales or losses.
Also read: Here’s everything you need to know about Ola Electric’s upcoming IPO
Bottomline
Vishal Mega Mart presents a distinctive investment opportunity, as it operates in the under-penetrated organized value retail market with no direct competitors of comparable scale.
However, the company has faced challenges in recent years, including intense market competition and dependence on outsourced manufacturing, which have affected its profitability. Additionally, fluctuations in economic cycles and inventory management risks further impact its performance. Therefore, investors should carefully evaluate all factors influencing Vishal Mega Mart’s operations and financial health before making an investment decision
