Avenue Supermarts makes it to top-100 most valuable firms on D-Street

Avenue Supermarts with an m-cap of Rs 39,442 crore stood at 67th position on BSE at 01:38 pm.

Avenue Supermarts, which owns and operates the chain of D-Mart supermarkets, has entered into the list of the top-100 most valuable companies in terms of market capitalisation (m-cap) following a sharp surge in its stock price on debut today.

Avenue Supermarts with an m-cap of Rs 39,998 crore stood at 65th position in overall m-cap ranking on the BSE at close. The company surpassed the m-cap of Indiabulls Housing Finance, Britannia Industries, Power Finance Corporation, Marico, Bank of Baroda, UPL and Pidilite Industries.

Shares of Avenue Supermarts ended at Rs 641 on BSE, a premium of 114% over the initial public offer (IPO) price of Rs 299. The m-cap of the company crossed Rs 40,000 crore to Rs 40,550 crore after the stock hit an high of Rs 650 during intra-day trade today.

The company, which recently concluded its Rs 1,870-crore through IPO, was subscribed more than 104 times earlier this month. The qualified institutional buyer (QIB) portion of the IPO was subscribed 145 times, high-net worth individual (HNI) segment was subscribed 278 times and retail investor portion saw 7.51 times more demand than the shares on offer.

ICICI Prudential Life Insurance Company had listed on the stock exchanges on September 29, 2016, entered into top 100-club with m-cap of Rs 42,722 crore. The insurance company currently commands m-cap of Rs 53,273 crore, standing at 46 positions in overall ranking.

Given the sharp listing gains, analysts advise booking profit in the scrip for now. The stock trades at 68.8x PE multiple (on 9FY17 annualised numbers), analysts say, and has already witnessed more than 100% upside on the day of listing.

"We believe that all the positive aspects of the company are already factored in the current stock price (i.e. better RoE profile, promoter’s strong background, strategically located stores, intense focus on maintaining lower costs and strong brand perception). Hence, we recommend the investors to book profits. Going forward, we don’t expect multiple re-rating due to stretched valuations," said Amarjeet Maurya, a senior equity research analyst at Angel Broking in a note.