Radhakishan Damani promoted-Avenue Supermarts, the owner and operator of supermarket retail chain D-Mart, is set to raise Rs 1,810-Rs 1,866 crore by offering 6.23 crore shares priced between Rs 290-299, say merchant bankers to the issue.
The issue will be open for bidding from March 8 to March 10.
Avenue Supermarts has reserved 1.87 crore shares for anchor investors’ book, 1.24 crore for qualified institutional buyers, 93.59 lakh for non-institutional investors and 2.18 crore shares for retail investors.
Grey market brokers say that the issue is quoting at a premium of Rs 170-180 in the unofficial market.
In its draft prospectus, the company had said that a large chunk of the funds raised through the issue will be used to repay debt.
D-Mart operates close to 120 stories, most of them concentrated in Maharashtra and Gujarat.
As of March 31, 2016, the company had a topline of about Rs 8600 crore, and a net profit of about Rs 320 crore, translating into an earnings per share of Rs 5.72.
The company’s earnings have been growing at 31 percent compounded for the preceding two years. Extrapolating that, the company is expected to report an earnings per share of roughly Rs 7.6 for this financial year.
An issue price of Rs 300 would mean a price earnings multiple of roughly 40 times estimated FY17 earnings.
Equity shares issued through public issue are proposed to be listed on both exchanges – BSE and National Stock Exchange of India.
Kotak Mahindra Capital Company is a global co-ordinator and book running lead manager to the issue. Other book running lead managers are Axis Capital, Edelweiss Financial Services, ICICI Securities, Inga Capital, JM Financial Institutional Securities, Motilal Oswal Investment Advisor and SBI Capital Markets.