Retail Stocks Perk Up Ahead Of Avenue Supermarts’ IPO
The Rs 1,870-crore Avenue Supermarts IPO is one of the largest from the sector in a decade
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Retail stocks are back in demand after two quarters on the back of the initial public offering (IPO) from Avenue Supermarts Ltd. which operates retail supermarket chain D-Mart.
Leading the pack is Future Retail Ltd., the largest organised retail store operator in the country. The stock has risen nearly 70 percent year-to-date, compared to a decline of a little over 20 percent in the second and third quarter of financial year 2017. Next on the list is V-Mart Ltd. which primarily operates in tier II and tier III cities, and has gained around 34 percent in the current quarter.
Tata group promoted Trent Ltd. is the only stock which had been a consistent performer in FY17 and has gained another 10 percent om the back of D-Mart's proposed listing.
So why this rally?
Well analysts say the Rs 1,870 crore Avenue Supermarts IPO if successful, will be one of the biggest listings from the sector in a decade, and this is expected to improve sentiment on Dalal Street.
Avenue Supermarts' market capitalisation is expected to be at 1.5 times its current revenue. The stock could trade at close to 40 times its FY17 earnings, making it the second most expensive stock in the sector after Trent.