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D-Mart raises Rs561 crore from anchor investors at upper end of IPO price band

LiveMint logoLiveMint 07-03-2017 Swaraj Singh Dhanjal

Mumbai: Avenue Supermarts, the parent of the D-Mart chain of food and grocery supermarkets, on Tuesday said that it has raised Rs561 crore by allotting shares to anchor investors as part of the so-called anchor book allocation, a day ahead of its initial public offering (IPO).

Anchor book is that portion of an IPO that bankers can allot to institutional investors on a discretionary basis. Anchor book subscription opens a day before the launch of an IPO and acts as an indicator of institutional investor interest.

Shares were allotted to anchor investors at Rs299 apiece, the upper end of the IPO price band of Rs295-299 per share.

The issue, worth Rs1,870 crore, will open on 8 March and close on 10 March. The company is divesting 10% of its total equity shares.

ALSO READ | D-Mart IPO: Value does not come cheap

Investors who participated in the anchor book allocation include Smallcap World Fund, New World Fund, Fidelity, Govt of Singapore, JP Morgan, T Rowe Price, HDFC Mutual Fund, ICICI Prudential Mutual Fund and SBI Mutual Fund amongst others. A total of 35 investors participated in the anchor book allocation.

Avenue plans to use Rs1,080 crore to repay outstanding debt and Rs300.6 crore to purchase and construct new stores.

Avenue Supermarts is one of the most profitable retailers in the country, and posted a Rs300.92 crore profit after tax on revenues of Rs8,800.03 crore in fiscal 2017, until December 2016.

D-Mart operates 118 stores with 3.59 million sq. ft of store space, across 45 cities.

The company records 59% of its sales from Maharashtra and Daman, and 18% from Gujarat, despite being present in eight states.

D-Mart’s is the third IPO this calendar year, following initial share sales of stock exchange BSE Ltd and Radio City FM operator Music Broadcast Ltd.

In 2016, 26 firms raised Rs26,493 crore through IPOs, data from primary market tracker Prime Database shows.

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