dmart ipo Avenues Supermart

This post on Dmart IPO (Avenue SuperMarts IPO ) tries to bring out consolidated brokerage views opinions, IPO Review / Analysis, Note/ reports and recommendation of brokerages , Analyst, Business New papers, Management views, information on Anchor investors, Subscription etc on Dmart IPO and shall be updated continuously till the closure of the issue The information collated from various sources and reports in public domain can  help investors to decide whether they should subscribe to Avenues Supermart IPO ( Dmart IPO ). )
Related Posts:
1) 
Avenue SuperMarts IPO Review (DMart IPO Review)
2) Avenue Supermarts IPO: Peer Analysis

Avenue SuperMarts IPO (Dmart IPO) : Allotment Status is out
Allotment Status can be checked here Check Allotment Here
Avenue SuperMarts IPO (Dmart IPO) : Subscription 
Subscription: Avenue SuperMarts IPO  ( x times)
 QIBNIIRetailTotal
Day 3 144.62 277.74 7.51 104.59
Day 2  9.14 4.97 4.06 5.71
Day 11.840.521.441.36

Avenue SuperMarts IPO (Dmart IPO) : Anchor Investors

Avenue SuperMarts IPO has raised about Rs  Rs561 crore by allotting shares to anchor investors as part of  anchor book allocation, a day ahead of its initial public offering (IPO). Investors who participated in the anchor book allocation include Atlanta, Smallcap World Fund, New World Fund, Fidelity, GIC Pte (Singapore) , JP Morgan, T Rowe Price, HDFC Mutual Fund, ICICI Prudential Mutual Fund and SBI Mutual Fund amongst others. 

Click to See Anchor List

Consolidated Views of Brokerages, Analysts, Business New Paper Reports, Management Views on Dmart IPO(Avenue Supermarts IPO)

  • Aditya Birla Money: “D Mart has a proven track record of operational and financial efficiency since 2002. From a single store in Mumbai, ithas emerged as the second largest and the most profitable retailer in the country. Its cluster based ownership model proved to be most successful model in the industry which the like of big corporate houses failed to employ. It has a history of no store closure in the last 10 years reflecting its store management efficiency. It enjoys 10% market share of the total organised retail industry. Its Revenue has grown at a CAGR of 40% over FY12-16 while its EBITDA and PAT has grown at a CAGR of 48% and 52% respectively. At the higher end of the price band, D Mart is valued at 36x FY17 earnings, which is at a slight discount to its closest listed peer, Future Retail (38x). In EV/EBITDA terms it is valued at 19x FY17 EBITDA, which is at a discount of 33% to its closest peer Future Retail (25.5x). Given strong management team, trusted brand image, highest profitability profile in the industry, high return ratios and high growth opportunity, we believe it should command better valuations. We recommend SUBSCRIBE on Avenue Supermarts  IPO (DMart IPO). “
  • Choice Equity Broking: “The company is the one of the fastest growing retailers in the country. Over FY12-16, total operating revenue increased by 40.4%, while EBITDA increased by 48.1%. EBITDA margin increased consistently from 6.2% in FY12 to 7.7% in FY16. PAT increased by 51.6% with expansion in margin from 2.7% in FY12 to 3.7% in FY16. Despite owning the retail properties, it has consistently improved the RoE from 8.9% in FY12 to 21% in FY16. Considering its efficient operating performance, the target market segment, attractive valuation and future growth prospects, we recommend a “SUBSCRIBE” rating for the Avenue SuperMarts IPO
  • Ajcon Global : The Brokerage house is of the view “At the upper end of the price band of Rs. 299, the IPO is valued at 36x at 9MFY17 annualized EPS and 59x at FY16 post issue EPS which is at a discount to its peers and we believe it is fairly priced considering its profitable growth prospects and better return ratios as compared to its peers. With due consideration to factors like a) focus on value retailing to well defined customer base, b) ownership model for retail stores, c) steady foot expansion via cluster based expansion approach, d) optimal product assortment and strong supplier network, e) efficient store operations and stringent inventory management, f) higher operating efficiency and lean cost structures; g) strong track record of growth and profitability; h) positive operating cashflow in last 5 years, i) no closure of store till date; j) professionally managed organization with entrepreneurial mindset and approach, we recommend investors to “SUBSCRIBE” the Avenue SuperMarts IPO.
  • Aditya Birla Money: “D Mart has a proven track record of operational and financial efficiency since 2002. From a single store in Mumbai, ithas emerged as the second largest and the most profitable retailer in the country. Its cluster based ownership model proved to be most successful model in the industry which the like of big corporate houses failed to employ. It has a history of no store closure in the last 10 years reflecting its store management efficiency. It enjoys 10% market share of the total organised retail industry. Its Revenue has grown at a CAGR of 40% over FY12-16 while its EBITDA and PAT has grown at a CAGR of 48% and 52% respectively. At the higher end of the price band, D Mart is valued at 36x FY17 earnings, which is at a slight discount to its closest listed peer, Future Retail (38x). In EV/EBITDA terms it is valued at 19x FY17 EBITDA, which is at a discount of 33% to its closest peer Future Retail (25.5x). Given strong management team, trusted brand image, highest profitability profile in the industry, high return ratios and high growth opportunity, we believe it should command better valuations. We recommend SUBSCRIBE on Avenue Supermarts Ltd. (D Mart). “
  • SPA Securities: “Revenue of ASLhas grown at a CAGR of 40% during FY12-16 compared to growth of 30% for V-mart, 28% for Trent and 20% for
    Future Consumer in the same period. PAT of ASL has grown at a CAGR of 52% during FY12-16 compared to growth of 27% for Vmart and 7% for Trent in the same period. Higher revenue and net profit per square feet does give ASL an edge over its peers as the absence of rental costs helps the company deliver higher operating margins. RONW for ASL stands at 23.4% in FY16 compared to 3.6% for Trent and 12.7% for V-Mart. Considering supernatural growth and significantly higher ROE, we believe ASL deserves premium over its peers. Trent and V-Mart are currently trading at 50.9x and 37x their FY17E EPS. At upper band of INR 299, ASL is valued at 36.1x its annualized EPS of FY17. We recommend a subscrbe to the Avenue SuperMarts IPO ( Dmart  IPO) .”

    ShareKhan:  “At the price band of Rs295-299 per share, the issue is priced at 52.6x and 51.9x its FY2016 EPS, respectively – a discount to some of its peers despite much better profitability and return ratios. Its track record of industry leading performance and a reputed pedigree makes Dmart IPO a quality investment option in the retail space.”
  • Dalal Street Investment Journal: “The company looks attractive as its EPS is 5.72 and considering upper price band P/E is 52.27x which  is much lower than its peers like future retail and Trent limited considering a really strong financial performance of a company, we suggest you to subscribe to Dmart IPO to get benefit from listing gains.
  • KR Choksey:  Avenue Super marts are considered as one of the most prominent player in the F&G market with a presence among 41 cities. The company has total 117 stores as on Dec’16 with a large revenue penetration from Maharashtra (63% of rev in FY16) followed by Gujarat (19% of rev), Telangana (10% of rev) etc. We believe that although the company has been following different business model such as ownership (higher capex against lease model) vis-à-vis rental by other large players like Future retail and Trent, the key ratios such as average ROE & ROCE has been lingering higher at 15% & 10% between FY12-16 against industry average of 7% & 5% respectively. Further, the company has total debt of Rs.12.4bn at the end of 9MFY17, which is expected to reduce by Rs. 10.8bn over FY18-20. This in turn could result company to stand at almost debt free level, which could improve return ratios further going ahead. Apart from this, we believe that company has also witnessed a decent growth in terms of sales per store (CAGR: 18%) and sales per sq feet (CAGR: 16%) over the period of FY12-16. Any further progress in terms of store addition and increase in more penetration among existing market could result in strong revenue growth over medium to long term. Despite the management has indicated gross margins to be at 15%, while OPM & NPM to remain at 8-9% & 4-5% respectively, we expect that any further progress for augmenting the revenue share from General Merchandise & Apparel segment (28% of overall rev during 9MFY17) could aid further margins, which in turn could result in improvement in the financial performance further.

  • Sana Securities: Subscribe to Dmart IPO
  • SP Tulsiyan: Subscribe to Dmart IPO


Standard disclaimer:  I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk.