Issue Highlights
Issue Period
|
8/3/17-10/3/17
|
Price Band (Rs.)
|
295-299
|
Issue Size(shares)
|
6,25,41,806
|
Issue Size (Rs. crore) #
|
1870
|
Issue Type
|
100% Book built
|
Face Value (Rs.)
|
10
|
Listing
|
BSE,NSE
|
Industry
|
Supermarket chain
|
Registrar
|
Link Intime India Pvt Ltd
|
Minimum Bid Quantity
|
50 shares
|
Maximum Retail Subscription (Rs.)
|
1,94,350 (13 lots)
|
BRLM
|
Axis cap, Edelweiss Cap, Kotak, HDFC Bank, ICICI sec, INGA, JM Fin,
Motilal Oswal
|
# derived figure
Issue Details
Offer for Sale: Nil
Fresh Issue: 1870
crore
Equity Shares
Outstanding Prior to the Issue: 56,15,42,680
Equity Shares
Outstanding After the Issue #: 62,40,84,490
Objects of the Issue
(1)
Loan repayment and earlier redemption of NCDs: Rs.
1,080 crore
(2)
Construction and purchase of fit outs for new stores:
Rs. 366.6 crore
(3)
General Corporate Purposes : NA
Company Profile
The company is India’s most profitable Food & Grocery retailer with a
focus on various product categories like food, FMCG, apparel and general
merchandise. Presently, ASL boasts 112 retail stores with a business area of
3.4 million sq. ft. located across 41 cities in Maharashtra (58), Gujarat (26),
Telangana (13), AP (3), Karnataka (7), MP (3), Chhattisgarh (1) and NCR (1).
Risks & Threats
1.
The USP of such super markets lies in the discounts
and various offers which are achieved through supplier relations; if such
stores fail to offer these perks then revenue shall be negatively affected
2.
The company operates in highly competitive market with
players like Big Bazaar, Reliance Retail, Spencer’s, Hyper City, Star Bazaar etc.
besides organized retail chains like Max, Westside and neighborhood unorganized
retail Kirana shops
3.
The business is manpower and capital intensive one
4.
Around 53 % of the revenue comes from the sales of
food products and this category is prone to continuously changing customer
taste
5.
Around 81 % of the revenue comes from stores in Maharashtra
and Gujarat and such geographical concentration could be a concern during some
adverse developments taking place in the region
Strengths & Opportunities
(1)
The company owns the underlying real estate of its
stores and hence this company is a proxy for real estate investment and might
give fat benefits in future
(2)
The company enjoys one of the lowest inventory days
in the market
(3)
The bottom-line and top-line are growing at an CAGR
of 52% and 40 % respectively
(4)
Growing urban young and working population augurs
well for company’s revenue growth
Financial Profile #
Parameter
|
FY 16
|
Price-to-Earnings Ratio ##
|
52.27
|
PEG (4 year)##
|
1.01
|
Operating Profit Margin
|
6.77
|
Net Profit Margin (%)
|
3.73
|
Return on Capital Employed (%)
|
23.46
|
Return on Equity (%)
|
23.62
|
Total Liability to Net worth
|
1.04
|
Price to Book Value ##
|
11.04
|
EV/EBITDA
|
26.9
|
OCF/NP
|
1.4
|
Inventory Days
|
29.73
|
TIE
|
6.42
|
M-Cap/Sales
|
1.95
|
Accrual Ratio
|
4.38
|
# at upper price band
## using post issue
OS shares
Comparison with the listed Peers #
NPM (%)
|
ROCE(%)
|
ROE(%)
|
PEG
|
Inventory Days
|
EV/ EBITDA
|
|
ASL
|
3.73
|
23.46
|
23.62
|
1.01
|
29.73
|
26.9
|
Future Retail Ltd
|
.21
|
.66
|
.81
|
NM
|
175.48
|
NA
|
Trent Ltd
|
5.18
|
5.1
|
5.5
|
NM
|
65.64
|
32.38
|
# moneycontrol data
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