DMart launches its QIP programme to raise at least Rs 4,000 crore

Avenue Supermarts has launched its qualified institutional placement (QIP) programme to raise at least Rs 4,000 crore. 

The country’s most valuable listed retail chain will issue 20 million fresh shares at a base price of Rs 1,999. Avenue Supermarts’ board will meet on February 10 to approve the QIP price. 

Shares of the company rose 4.35 per cent to close at Rs 2,249 on Wednesday. The company is currently valued at Rs 1.41 trillion and is among top 20 most valued firms in the country. 

The QIP will help promoters of the company, led by Radhakishan Damani, pare their holdings, which currently stands at 79.73 per cent. 

Holding in the DMart retail chain operator has to reduce to below 75 per cent by March 20, to meet the minimum public shareholding requirement. 

The QIP could lead to dilution in promoters’ stakes by 2.8 per cent. The promoters could be required to dilute another 1.9 per cent, which bankers said could be done through the offer for sale (OFS) route. 

For the quarter ended December 2019, Avenue Supermarts had reported a 53 per cent year-on-year jump in net profit to Rs 394 crore, surpassing Street estimates. 

Its net sales for the period had increased 24 per cent to Rs 6,752 crore despite weak consumer sentiment.