DMart parent launches Rs 4,000 crore QIP

BENGALURU: Avenue Supermarts, which owns the DMart supermarket chain, on Wednesday launched a qualified institutional placement (QIP) to raise up to Rs 4,000 crore. Shares rose 4.4% to Rs 2,249 on the BSE, outperforming the sensex which closed 0.9% higher at 41,143.
Avenue Supermarts on Wednesday informed the BSE that the company’s board had approved the issue of 2 crore equity shares at a floor price of Rs 1,999.The QIP may allow a discount of 5%.
Following the QIP, promoter Radhakrishan Damani’s stake will come down to 75% from 79% to comply with Sebi guidelines on minimum public shareholding. For the third-quarter, Avenue Supermarts reported Rs 394 crore profit, a 55% year-over-year increase due to lower taxes after the government’s cut in corporate taxes last year.
As of Wednesday's close, the stock is at No.21 in terms of marketcap at Rs 1.35 lakh crore. But for a short span of time on Wednesday, the stock touched a record high of Rs 2,273, and gained entry into the top 20 companies by marketcap, displacing Wipro and HDFC Life.
Kotak Mahindra Capital, Axis Capital, DSP Merrill Lynch, JP Morgan India, HSBC Securities & Capital Markets (India), IDFC Bank and JM Financial are the book running lead managers for the QIP.