dmartGlobally, India is seen as one of the key consumer markets from where future growth is likely to emerge. It is estimated that India‘s consumption expenditure will increase to USD 2,000bn by 2020 and will surpass the consumption expenditure of developed economies like Italy, France and United Kingdom

India is a consumption-led economy with private consumption forming around 60% of the GDP. Several factors will continue to drive the consumption and contribute to the economy including:

  • Favourable demographics, dropping dependency ratio, rapidly rising education levels and steady growth of urbanization
  • Growing young & working population
  • Increasing penetration of mobile technology and internet infrastructure
  • Government‘s focus on skill development, job creation, infrastructure, manufacturing and investments.
  • Cashless environment promoting more impulsive purchases.

Avenue Supermarket Pvt Ltd.

The company has 112 stores located across 41 cities in India offering a wide range of products with a focus on the Foods, Non-Foods (FMCG) and General Merchandise & Apparel product categories. The company has 21 distribution centres and six packing centres in Maharashtra, Gujarat, Telangana and Karnataka.

The growth plan of the company is to deepen their store network in southern and western India and gradually expanding it to other parts of India. They operate and manage all their stores and use the ownership model (including long-term lease arrangements, where lease period is more than 30 years and the building is owned by them).

Majority of products stocked are everyday products forming part of basic rather than discretionary spending. The products are sourced directly from manufactures/producers to benefit from economies of scale.

Radhakishan S. Damani, brings his vision and leadership to the company and the Board and senior management have a proven track record and an in-depth understanding of the retail business in India and local consumer preferences. (Avg 18+ experience)

D-mart is the most Profitable Retail chain in the country

Size of the IPO – 1870 Cores.dmart-logo

Reason for ipo – The main plan is expansion of more stores in different parts of India and repayment of loans and reduction of overall debt.

D Mart to add 60% more store space -To build 900,000-sq ft store space by FY20

Business Snapshot –

  • Minimize operating costs by having zero rent to pay.
  • Value retailing to a well-defined target consumer base
  • Business is not materially affected by seasonality or temporarily depressed macro-economic conditions.
  • Everyday low price ( EDLP) is a pricing strategy promising consumers a low price without the need to wait for sale price events or comparison shopping.
  • Layout and design of the stores are consistent and predictable to make shopping easy.
  • Internally assess our employees to periodically identify competency gaps and use development inputs (such as training and job rotation
  • Increase use of IT to improve operations in an efficient manner

Closest Peers

  • Trent
  • Spencers daily
  • Bigbazaar Future Retail
  • V-Mart Retail
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    Source: https://www.bloombergquint.com/markets/2017/02/15/how-d-mart-stacks-up-against-peers

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