Avenue Supermarts Limited which runs the famous retail chain store D-Mart, is planning to raise around Rs.1,870 crore through its IPO. The Avenue Supermarts Limited IPO or Dmart IPO is expected to hit the market in the last week of February 2017. This IPO in the country’s retail sector is coming after considerable gap and is prompted by Radhakishan Damani, who is considered an ace investor himself.

About the Company
Avenue Supermarts Ltd. (ASL) owns & operates a supermarket chain of D-Mart stores. D-Mart is a one-stop supermarket chain that offers customers a wide range of basic home and personal products under one roof. DMart stores focus is on home utility products – including food, toiletries, beauty products, garments, kitchenware, bed and bath linen, home appliances. Its business approach is to retail quality goods at competitive prices and majority of products stocked are everyday products forming part of basic rather than discretionary spending. Food items account for a little over 50% of the sales of the retail chain
DMart opened its first store in Powai in 2002. As of September 15, 2016, it had 112 stores with Retail Business Area of 3.40 million sq.ft, located across 41 cities in Maharashtra (58), Gujarat (26), Telangana (13), Karnataka (7), Andhra Pradesh (3), Madhya Pradesh (3), Chhattisgarh (1) and NCR (1). The brands D Mart, D Mart Minimax, D-Mart Premia, D Homes, Dutch Harbour, etc are brands owned by ASL

Expected Price ASL (Dmart) IPO

Equity before issue561.543  crore
FV10
Amount being Raised1870  crore
Expected Valuation of  Company18000 crore
Expected IPO price for this valuation 287
Expected Fresh equity65.16 crore
Peer Analysis

This is only a very preliminary peer analysis & shall soon be updated with more peers and more data in due course.

   Figures in Rs. Crore
ParticularsDstarTrentFuture Retail *
Revenue from Operations8,588.122494.169751.89
Total Revenue (A)8,606.112593.0510087.03
Total Expenses (B)8,113.892376.388956.86
Profit / (Loss) before Taxation (A-B) (C)492.22103.4454.93
Net Profit/(Loss) as Restated321.2162.9428.33
Net Profit Margin3.74%2.52%0.29%
Equity 561.5033.2394.27
FV10.001.002.00
EPS5.721.890.60
Approx Price /Market Priice299257.40258.00
PE52.27135.90_
    
EPS Annualized on Q3FY17 4.488.58
PE ( on above EPS) 57.4630.07
Net ProfitMargin  (Q3Fy17) 8.65%2.34%
Return on Net Worth21.13%4.38%0.78%
NAV26.92432.7539.76

*   Bharti Retail  was merged with Future Retail. The combined entity was further demerged into two companies—the one on the front-end retained the name Future Retail and back end retained the name Future Enterprises. 

Financials of ASL (Dmart)
ParticularsFor the year ended
March 31,March 31,March 31,March 31,March 31,
20162015201420132012
Revenue    in Rs. Millions
Revenue from Operations85,881.1964,394.3346,864.8833,408.5422,085.60
Other Income179.86182.56158.37142.5138.49
      
Total Revenue (A)86,061.0564,576.8947,023.2533,551.0422,224.09
      
Expenses     
Purchase of stock-in-trade74,398.5356,484.7340,865.3229,379.2519,567.71
Changes in inventory of stock in trade-1,320.79-1,612.80-1,021.04-804.89-728.14
Employee benefit expenses1,486.061,340.62873.37686.65453.12
Other Operational Costs3,086.172,333.951,810.601,273.96836.51
Finance Costs908.24723.61556.76425.85260.19
Depreciation and amortisation984.29815.41570.13457.86374.66
Other expenses1,596.381,257.91918.87723.48576.13
      
Total Expenses (B)81,138.8861,343.4344,574.0132,142.1621,340.18
      
Profit / (Loss) before Taxation (A-B) (C)4,922.173,233.462,449.241,408.88883.91
      
Tax Expenses     
Current Tax1,620.901,064.98770.85401.5257.83
Deferred Tax charge93.9844.2264.3270.4823.87
Tax in respect of earlier years1.32-0.180.66
Total (D)1,716.201,109.20834.99471.98282.36
      
Net Profit/(Loss) after taxation (C-D) (E)3,205.972,124.261,614.25936.9601.55
      
Net Profit / (Loss) Before Restatement Adjustments3,205.972,124.261,614.25936.9601.55
Material Restatement Adjustments(F)6.82-6.99-0.722.53.39
Deferred Tax adjustments(G)0.460.060.19-0.85-0.88
Net Profit/(Loss) before the adjustments on account of changes in accounting policies (E+F+G)3,213.252,117.331,613.72938.55604.06
Adjustments on account of changes in accounting policies
Net Profit/(Loss) before Minority Interest and Share in Net Loss of Associates3,213.252,117.331,613.72938.55604.06
Minority Interest0.460.44
Share in Net Loss of Associates0.72
Net Profit/(Loss) as Restated3,212.072,116.891,613.72938.55604.06
Equity before issue5615.43    
FV10    
Amount being Raised18700    
Expected Valuation of  Company180000    
Expected IPO price on above Valuation287   
Expected Fresh equity651.57    
Equity post Issue6267    
EPS on Post Issue Equity5.13    
PE on Post Issue Equity55.95