Follow Us "Stock Market")
Vishal Mega Mart's stock plunged nearly 8% on Tuesday due to a promoter's stake sale of up to Rs 9,896 crore via block deals. The floor price was set at Rs 110 per share, a 12% discount.
Shares of Vishal Mega Mart Ltd on Tuesday (June 17) witnessed a sharp decline of nearly 8% following reports of a massive block deal involving promoter stake sale. The stock opened at Rs 115.85 on the BSE, down 7.25%, and slipped further to Rs 115.10, marking a 7.84% fall by 9:19 am.
The decline came amid reports that promoter entity Samayat Services, which held 74.55% of Vishal Mega Mart as of March 31, planned to offload shares worth up to Rs 9,896 crore via block deals. Earlier, reports had suggested a smaller Rs 5,057 crore deal, involving the sale of a 10% stake. According to CNBC-TV18, the floor price was fixed at Rs 110 per share — nearly 12% below the previous closing price.
Kotak Mahindra Capital and Morgan Stanley are acting as advisors to the block trade, the reports said.
Related Articles
On the NSE, the scrip saw massive volumes, clocking a turnover of Rs 11,077.75 crore in early trade, indicating heightened investor activity amid the promoter's stake sale.
Strong FY25 performance overshadowed by market reaction
Despite the sell-off, Vishal Mega Mart had a solid financial showing in FY25. Along with value retail peers V-Mart, Style Bazaar, and V2 Retail, the company posted a 24% growth in combined revenue, driven by a 16% rise in retail space and robust double-digit same-store sales growth (SSSG). V2 Retail led the pack with a 60% store area expansion and 29% SSSG, while others, including Vishal Mega Mart, posted SSSG in the 12–13% range.
A report by Motilal Oswal Financial Services Ltd (MOFSL) highlighted improved profitability in the value retail sector. Blended gross margins rose 50 basis points (bps) YoY to 29% in FY25, and Q4 margins expanded by 150 bps thanks to better product mixes, increased MRP sales, and procurement efficiencies.
Vishal Mega Mart stood out with the highest gross margin expansion among its peers — 80 bps YoY for FY25 and 180 bps in Q4 — fueled by an increasing contribution from private-label brands. Its pre-Ind AS EBITDA margin climbed to 8.2% in FY25, up 180 bps YoY, the highest in recent years. The gains were attributed to improved sourcing, operating leverage, and efficient inventory turnover.
Operating cash flows (pre-Ind AS) surged to Rs 1,000 crore in FY25 from Rs 400 crore in the previous fiscal. Free cash flow also improved, despite aggressive store expansions. Notably, Vishal Mega Mart alone contributed 60% of the total revenue in the value retail segment, along with the majority of the profit and cash flow generation.
