Price band for the issue was fixed at upper band of Rs 299 per share.
The initial public offer of Avenue Supermarts, the operator of retail chain D-Mart, saw robust investor demand and was subscribed 106 times with strong demand from institutional and retail investors.
D-Mart owners Avenue Supermarts, who raised an IPO of 104 times at the offer price of Rs.299 per share, listed on stock exchange at a whopping Rs.610, which is double the price and after one hour, it is still hovering around 580 range. The IPO was the biggest since PNB Housing Finance's Rs 3,000 crore offer in October a year ago. The set for Retail Investors was oversubscribed 7.36 times. Proceeds of the issue would be utilised for various purposes, including loan repayment. Expansion and macro environment will drive D-Mart's performance, he added. In the last five years profits have grown at a CAGR of 40 percent while top line has expanded 30 percent every year to Rs 8,780 crore for the nine months of FY17 while its profits for the same period were Rs 387 crore.
Mr Choksey has a word of caution: Since the D-Mart shares are trading at premium valuation, he says, "investors should hold for the long term".
The analysts believe that D-Mart will continue to show such growth in future also. There were 41 stores in FY 2011 that Avenue Supermarts had which had risen to 118 by December 31, 2016. The other Book Running Lead Managers to the issue were Axis Capital Limited, Edelweiss Financial Services Limited, HDFC Bank Limited, ICICI Securities Limited, Inga Capital Private Limited, JM Financial Institutional Securities Limited, Motilal Oswal Investment Advisors Private Limited and SBI Capital Markets Limited.