Vishal Mega Mart IPO: Why analysts recommend subscribing for long term; know here

The Initial Public Offering (IPO) of Vishal Mega Mart, a leading player in the retail market, is set to open for subscription from December 11 to December 13, 2024. The company has fixed a price band of Rs 74 – Rs 78 per share. The total issue size of the Vishal Mega Mart IPO is Rs 8,000 which is an offer for sale (OFS). Investors can bid for a minimum lot size of 109 shares and in multiples thereof. The allocation ratio for the issue is set at 50 per cent, 35 per cent, and 15 per cent for Qualified Institutional Buyers (QIBs), retail investors, and Non-Institutional Investors (NIIs), respectively. Here's why analysts recommend investors for the long-term. 

Why analysts recommend Vishal Mega Mart IPO as a long-term investment

SBI Securities' analysts have suggested the IPO to apply from a perspective of long term due to the company's presence across product categories and stores throughout India and has track record of profitable growth.

Vishal Mega Mart is performing better than its competitors like Avenue Supermarts (DMart). "The company makes relatively better EBITDA margin and similar PAT margin as compared to its major peer Avenue Supermarts," the brokerage said.
Analysts of SBI Securities have recommended investors subscribe to the issue at a cut-off price for the long term.

Meanwhile, another brokerage, Bajaj Broking has stated that annualised earnings of FY25 are attributed to its post-IPO fully diluted paid-up equity capital, the asking price corresponds to a P/E of 69.03.

The brokerage also said that the issue price of the Vishal Mega Mart is aggressively priced based on FY24 earnings. The brokerage, however, recommends applying it from a long-term horizon.

Domestic brokerage, Ashika Stock Broking said "In terms of the valuations, on the higher price band, the company demands P/E multiple of 69.2x post-issue H1FY25 annualised EPS and EV/EBITDA multiple of 28.1x. The brokerage also has a 'subscribe' rating from the long-term period.

Key details of Vishal Mega Mart IPO

BRLMS and Registrar

The IPO is being managed by several leading wealth management companies like Jefferies India, JPMorgan India, Morgan Stanley India, Kotak Mahindra Capital, ICICI Securities, and Intensive Fiscal Services. The official registrar of the IPO is KFin Technologies.

Important dates

As mentioned earlier the IPO will open for subscription on Wednesday, December 11, 2024, and close on Friday, December 13, 2024. The basis of allotment will be finalised on Monday, December 16, 2024. The stock will debut on the exchanges - BSE and NSE - on Wednesday, December 18, 2024.