D-Mart’s Parent Looks To Raise Almost Rs 4,000 Crore Through QIP

Avenue Supermarts Ltd. is looking to raise Rs 3,998 crore through its qualified institutional placement that opens today.

The parent of D-Mart chain of supermarkets will issue up to 2 crore shares at a floor price of Rs 1,999.04 apiece, according to its stock exchange filing. The company can also choose to offer up to 5 percent discount to the floor price, it said.

If Avenue Supermarts manages to raise the full amount, according to BloombergQuint’s calculations, it will result in an equity dilution of 3.09 percent.

Promoter Radhakishan Damani has been selling his stake in Avenue Supermarts to comply with the Securities and Exchange Board of India’s requirement of lowering promoter holding to 75 percent. That has been a major overhang for the company’s stock. During the quarter ended December, the billionaire investor had pared stake in supermarket chain operator by 48 basis points. As of December 2019, promoters held 79.73 percent stake in the company. Stakes held by domestic mutual funds and foreign institutional investors stood at nearly 4.17 percent and 6.21 percent, respectively.

Shares of Avenue Supermarts closed 4.35 percent higher, before the QIP was announced. That compares with the benchmark Sensex’s 0.87 percent gain.