Avenue Supermarts Limited IPO Message Board (Page 101)

D-Mart IPO

GMP 224 – 226

Eagle eye Mam. I blindly apply on the equities green flagged by you.. please suggest whether we should opt for D mart IPO.

Dmart may list around 380

Abe tujhe kisne ca banaya hai chacha.
450.listing minimum.

Analysis of upcoming IPO of Avenue Supermarts has been loaded on www.sptulsian.com.

You can access it in the Free Zone in the IPO Analysis section. The section can be accessed at:
https://www.sptulsian.com/free-zone/ipo-analysis

IPO Analysis: Avenue Supermarts Limited
Verdict: A value(able) cart!
Avenue Supermarts is entering the primary market on Wednesday 8th March 2017 to raise Rs. 1,870 crore via fresh issue of equity shares of Rs.10 each, in the price band of Rs.295 to Rs.299 per share. Representing 10.02% of the post issue paid-up share capital, at the upper end, the issue closes on Wednesday, 10th March and is likely to list on 20th March.
Avenue Supermarts, 91.36% owned by ace investor Radhakishan Damani and family, runs 118 food and grocery stores, under ‘DMart’ brand, covering 3.6 million sq.ft. retail space, mainly across Western India, with ~75% stores concentrated in Maharashtra and Gujarat. With USP of value-retailing, most of its stores are owned, unlike organized competition operating on leased premises, giving the company savings of nearly 7-8% of sales as lease rentals, a key edge over peers, mainly Reliance and Future Retail, in the listed space.
Company’s financial growth has been spectacular, to say the least. From FY14, while store count rose at 18% CAGR, from 75 to 117 (as of 31-12-16), revenue and PAT CAGR growth was much higher at 26% and 38% respectively, despite competition from e-commerce intensifying during this period. For FY16, on revenue of Rs. 8,588 crore, PAT of Rs. 319 crore was earned, translating into a net margin of 3.7%.
During first nine months of FY17, revenue and PAT has already surpassed full year performance of fiscal 2016, at Rs. 8,784 crore and Rs. 387 crore respectively, strengthening net margin to 4.4%. This kind of growth and margin strength on such high scale, with three quarter sales coming from food/ FMCG, amid tough competition, is a classic example of B-school case study, as retail is one of the most difficult businesses, given multiple operational challenges. Infact, world’s most well-respected investor Warren Buffet has described retail as a ‘have-to-be-smart-everyday-business’ given its complexity!
Objects of issue comprise (i) repayment of debt / NCDs worth Rs. 1,080 crore over FY18-FY20 (Rs. 625 crore in FY18, Rs. 320 crore in FY19, Rs. 135 crore in FY20) and (ii) construction and fit outs of new stores covering 2.1 million sq.ft., over FY18-FY20. This is significant expansion – almost 60% growth from the current retail area.
On equity of Rs. 561.54 crore, EPS for 9MFY17 came in at Rs. 6.9, up from FY16’s Rs.5.68. Current net worth stands at Rs. 1,905 crore, of which, 91.36% is owned by promoter and balance is with employees. Since dilution is small at just about 10%, promoter stake will remain high at 82.2%, post IPO, also indicating low float. Total debt, as of 31-12-16, stood at Rs.1,408 crore, while cash and equivalents was at Rs. 66 crore. Repayment from issue proceeds will curtail the current debt equity ratio of 0.7:1 to 0.2:1, coupled with equity expansion.
At Rs.299 per share, Avenue will have market cap of Rs. 18,660 crore and enterprise value (EV) of Rs. about 19,375 crore. This leads to EV/EBITDA and PE multiple of 18x and 31x respectively, based on FY17E numbers, which is favourable vis-à-vis Future Retail (not comparable with Reliance Retail). On one year forward (FY18E) estimates, these multiples for Avenue are at 14x and 25x respectively.
Below is a peer comparison for key large listed retailers:
Particulars
Avenue
Future Retail
Reliance Retail
No of stores
117
610*
3,553
Retail Space (million sq ft)
35.9 mn

13.25 mn




9MFY17 Financials in Rs. crore



Revenue
8,784
12,591
23,433
Gross Profit Margin
15.6%
24.8%
NA
EBITDA
789
422
837
EBITDA %
9.0%
3.4%
3.6%
PAT
393
245
NA
PAT %
4.5%
1.9%





Valuation (FY17E)



Mcap (Rs cr)
18,660
12,161

EV (Rs cr)
19,375
13,740

EV/sales (x)
1.66x
0.82x

EV/EBITDA (x)
18.47x
23.45x

PE (x)
30.5x
35.2x

*only considered 231 Big Bazaar (large format) stores and 379 Easy day (small format)
Since Avenue has one of the best inventory management (holding just 26 sale days inventory as against 80-100 days for Future Retail), its EBITDA of 9% v/s 3-4% of peers, despite lower gross margin (as shown in above table) is a huge differentiation, given the wafer-thin margins of the industry. Also, Avenue has stores located in rich corridor of West India, as it adopted cluster-based expansion to keep costs under check, as against top-down approach beginning with metros tickling down to tier 3 towns. Thus, all this gives it a better turnover per sq. ft., higher return on capital employed and faster growth.
To conclude, Avenue Supermarts scores on fundamentals and pricing. Promoter standing is a cherry on the cake, making the issue a subscribe, both for short and long term.
Disclosure: No interest.

Regards,
Team sptulsian.com
Investment Adviser

Avenue Supermart IPO bid at 5 PM

QIB: 1.84X
NII: 0.52X
RII: 1.46X

Total 1.26X

Be alart ,a big pitfall are created by oparetors for retailers.

It means what?

If some one sells at 230 Rupees premium that is 530 than someone buys at 530 and if a person buying at 530 will sell at approxx 700 that at which valuations the price is justified. We should always not look at peers for valuation but also apply our mind and one must sell if IPO opens at a premium of Rs 230 i.e. 530. and book profits. It is purely an operators game. and that game may trap retail investors so be careful

Trying to resolve peoples query which is still very consistent.

1. Can I apply multiple application with same PAN number?
No, in that case all application will get rejected. Apply one application with one PAN. You can have multiple application but with all different PAN numbers.

2. Can I apply more lots? Would that increase chance of allotment?
You can apply as many as lots till 2lac limit. But what is the benefit? There is none, as all good IPO always subscribe more then 100%. So, there is no benefit. Only one lot is good enough to get allotment if lucky.

I am always applying with one lot, one application with one PAN number. And most of the time, I am getting the allotment.

I have ordered only 50 shares of it .What is chances of getting the IPO.

Hi

Friends, please stay away from Infibeam stock. Its promoters are manipulating its stock price.

1. Bennett Coleman bought a stake in Flipkart on Feb 17, 2017 for Rs 260 crore. It wanted to buy stake in Infibeam for a similar amount roughly Rs 250 crore to Rs 300 crore then why it bought for only Rs 60 crore? Bennett Coleman is an existing investor in Infibeam and will gain if the stock price of Infibeam goes up. Bennett Coleman received phone call from promoters of Infibeam during an ongoing Board meeting on Jan 25, 2017 and got access to confidential insider information about acquisition of CCAvenue and therefore it agreed to buy warrants for just Rs 60 crore. Phone records are proof of it. What were independent directors doing in that board meeting? Why didn’t they object to calling Bennett Coleman in on-going board meeting? The company did not close its trading window during its Board meeting in Jan and Feb, 2017 and gave free pass to all insiders to trade on insider information. It is a violation of insider trading and corporate governance norms.

2 Watch CNBC TV18 interview of Feb 23, 2017of Neeru Sharma (director in Infibeam). She did not answer the question why promoters didn’t invest such a small sum of Rs 60 crore themselves in company rather than taking it from Bennett Coleman? Bennett Coleman picking up a stake makes headlines. You will see more preferential allotment being done to Bennett Coleman or someone at a higher price (Rs 1500 or Rs 1700 per share or higher) in coming days for further pushing up the stock price. Infibeam needs to raise money by diluting its stake at a higher price or increase its share price to pay for the acquisition of CCAvenue in stocks.

3. From where will Infibeam get Rs 2,000 crore when it earns just about Rs 40 crore profit in current fiscal year? How much CCAvenue earns in revenues and profits every year no one knows. Infibeam does not want to share any information with its shareholders about CCAvenue. How can CCAvenue be worth Rs 2000 crore in Jan 2017 when Infibeam bought a stake in it a few months ago at a valuation of Rs 1500 crore? Why no auditor or investment banker or an expert opinion was taken to arrive at a fair valuation of CCAvenue? How can a valuation of CCAvnue be known to Infibeam beforehand without doing its due diligence and knowing the risks and liabilities involved? The acquisition was under cover for a longer period of time than it is made to appear.

4. Why do we always see research report on moneycontrol on Infibeam stock only from KRChoksey and no other research/brokerage house publishes it? Deven Choksey is a family friend of promoters. Phone records are proof of it. He is helping in manipulating stock price by always publishing research reports with higher and higher targets. Is he also having insider information, your guess is right.

5. Why no domestic institution, mutual fund, insurance company or FII is willing to buy a single share of Infibeam when its stock price has more than tripled in less than a year? Why only Bennett Coleman is buying?

SEBI is looking into all these issues actively and accessing phone records, a complaint has been filed with it. In April when one year lockin period from IPO gets over, promoters and other pre-IPO shareholders will start offload majority of their stakes in market at higher price. After SEBI passes its order, this stock will fall down to double digits from four digits.

sorry that is 1.17 not 1.7

IPO subscribed around 1.7 times till 4:00 PM.

At which site we can see dmart subcription

i have applied two application through ASBA in same pan no is this right, if wrong what i do

ok. then tell me one thing. if have apply from two different banks with two different pan but demat is same. now what will happen.

Wrong. You will not get allotment and both the applications of yours will be rejected. If you are keen in applying more then one application then open more demat account with different pan nos of your family/friends.

NII crossed 100 as predicted by Eagleye!!!

Two different pan and one demat account not possible.

Dear Eagleeye di

What is your view now on RII application in Avenue Supermarket after the music broadcast is already subscried by more than double of your expectations. Any change or about 4 times

@ 3:30 Pm 1st Day

Already 1.1 times subscribed.

subscribed more than 70% till 3:00 PM

Where you checking the subsciption details please

It may be trapped retailers,
Don''t wait after listing.better to sell application in grey market.

The number of stores at present is 118. Kindly rectify the information mentioned in the report.

I HAVE 6 APPLICATIONS IN MUMBAI ANY BUYERS

Anybody want to buy 4 application of d mart in jaipur please reply