Indian budget retailer Vishal Mega Mart’s IPO draws bids worth $19 billion (#1686227)

Vishal Mega Mart’s initial public offering drew bids worth $19 billion on Friday as institutional investors piled in, underscoring confidence in the budget retailer’s growth prospects and its resilience amid a quick-commerce boom.

Investors placed bids for 20.6 billion shares at the end of the three-day process, per exchange data, far above the 756.8 million shares on offer from existing shareholder Samayat Services.

Institutional buyers including foreign institutions and mutual funds placed bids for about 81 times the shares reserved for them, while the portion reserved for retail investors was subscribed just 2.3 times.

Vishal Mega Mart did not sell new shares in the $943 million IPO.

On Tuesday, the company allocated shares worth about $283 million to anchor investors including the Singapore government and funds of JP Morgan and HSBC.

The company, which sells clothes for as low as 99 rupees (just over $1) and groceries, competes with Reliance Retail, DMart and Tata Group’s Star Bazaar in India’s $600 billion grocery and supermarket industry.

Vishal’s rivals, however, have struggled with high inflation and the rise of quick-commerce companies as major rivals. Analysts say Vishal Mega Mart, with 70% of its stores in smaller cities where quick-commerce is nascent, is relatively insulated from this threat.

The supermarket operator’s IPO coincided with those by fintech firm MobiKwik and TPG-backed healthcare company Sai Life Sciences.
Indian firms have been rushing to go public, with more than 300 companies raising $17.50 billion so far this year, more than double the amount raised in the same period last year.

Vishal Mega Mart’s shares are likely to begin trading on Dec. 18.