Avenue Supermart: a compounding machine?

(vgutti) #21

Article on D-Mart in one of the telugu website…

(tapas dash) #22

Article on D-mart IPO

(value_hunter) #23

@Marathondreams Completely Agree with you. Its my first post ever on this forum, though I am a regular reader and learner on this very resourceful platform. Have been benefiting a lot from in-depth and thoughtful ideas of the members who post regularly. My association with equity market as investor and learning therein forces me to ask few important question which I am sure every equity investor should ask him/her self before putting up hard earned money -

  1. Equity is an asset class and every asset has an intrinsic value, and as an investor your first and foremost responsibility is to get a fair idea of what is the intrinsic value of a business that you should be OK to pay based on the economic characteristics of the business.
  2. Based on your judgment of this value, you need to figure out the nuts and bolts of the business which will remain in place to propel its growth to the next orbit in probably min. 5-10 year timeline as one’s time horizon may permit to allow that intrinsic value + your expected return to get reflected in the price at that point in time.
  3. It is even more import for high PE growth companies and margin of error is so low that a hair line miscalculation may cost you huge price. E.g. just look at Dr. Lal Path Labs, Snowman logistics and so many are there.
  4. Regarding this IPO, ask yourself what is so special in the business model that guarantees me to pay back my price only after 50 years (PE=50+) :slight_smile: . BIG BAZAR, VISHAL Mega Mart and many others are bleeding to pay to their employees forget about equity investors.
  5. Will you go to super market to buy Rs. 10000/- worth of stuffs every month getting all the pain of collecting and picking and bringing it to your house by paying 10% extra or you will select a prefixed title “monthly home items” on Amazon or Flipkart APPs drop down menu at 10% discount while enjoying inside your AC bed room eating your favorite snacks and watching Lionel Messi hitting goals after goals :smiley: . I generally believe your behavior towards luxury changes four fold if your income becomes double :wink: Think about it.
  6. Regarding this IPO, What has suddenly made promoters to start thinking about exponential growth by raising money from market, however as far as I understand the market, consumer sector is getting badly hit due to no new creation of job and big job cuts in start-ups bubble bust.
  7. To sum up my thoughts, IPOs are best abbreviated “Its Probably Overpriced” for a long term INVESTOR, however, in euphoria you may make money because fools pay you for short term greed. Nevertheless, Its difficult to predict who gonna win and who gonna loose the game because its nothing more than a toss of coin. What is more important is that you understand that you are an investor and not a speculator.
    P.S : I am not a SEBI registered Analyst but just an equity market enthusiast. The opinion expressed are personal and have no interest in this IPO

(kaustubhkale) #25

Quality comes at a price. Multiples are also higher for a reason as compared to not so good and efficient competitors. Refer the BBG Quint link or pre-IPO not of Ambit.

Ambit_AvenueSupermarts_PreIPO_DisforDifferent_16Jan2017.pdf (360.3 KB)

(Satya Prakash) #27

Did anyone tried to understand the effect of GST and rental on it.

Retail don’t get the benefit of rental offset as other industry command. D-Mart owns most of the property so it saves on rental but pay big price for property.
So, when GST get passed and rental offset can be possible with other payables to govt., is the present model good for the company?
Or, it mitigates the advantage compared to others in retail biz?

(Bheeshma Sanghani, PhD) #28

Dmart is an example of a near perfect implementation of segmenting, targeting and positioning. Something that always seemed theoretical to me when I mugged it up during the marketing exams but now I know better. To think that ~85% of its revenues come from only two states - guj and mah. It’s got a really long runaway ahead of it. I am a regular at Dmart and am always amazed at the offers. You almost always end up buying at least 2x more than what you initially set out to buy. It deserves every bit of premium that mr market assigns to it and some more.


But DMart never has any offers at all. They just price their products really cheap (wholesale prices if you can call it). R. Damani is averse to offers proactively.

(Vivek) #30

DMART has started online store known as D MART READY https://www.dmart.in/ Last month in
mumbai , they are opening 41 store in mumbai where you can buy online
and collect the material near you residence ,ie pick up points ,Some
store are in operation in chembur (E &W) ,Govandi (E) Ghatkopar
(East & west ) , Andheri east and west , new mumbai , Vile Parle
east , rest of the stores are to be ready , they are having fair
response from public as it is still not made public ,

Now, you
can shop online and pick up your order from a DMart Ready Pick-up Point
conveniently located near you. You can also choose to receive your order
at your doorstep.

(Pavas) #31

http://dmartipo.linkintime.co.in/ for allotment status

(kanvgarg123) #33

Got 0 Lot. Haven’t got allotment in last 8-9 issues I participated. :frowning:

(ASPN) #34

Guys, let us not discuss on whos got the allotment and whos not. Sharing an old article on the changed process of IPO allotment.


To put it in simple words, if you apply for a single lot, chances of getting the allotment is much more (than applying for max lots permissible for retail individual investor).

(vinoths) #35

As you may know, Avenue Supermart will be listing tomorrow. I am sure it will be stellar listing with high premium. What would be best price range to buy this shares for long-term? Or Is it worth waiting for correction and then enter?


(sko5prasad) #36

Don’t know that current market euphoria will last for coming days or not.
But certainly this is the stock one should have in long term.

(Krishnendu) #37

Even I have the same question. As per Gray Market it will have a premium of 150-175 . So I guess any price between 300-400 will be a good bet but anything above that needs correction. Since at 400 it will command 53 PE it’s other peers trade around 40-43 PE except Trent (80 PE).

(tbhavesh) #38

I may be wrong…the listing price will be in excess of 500…

(GMan) #39

Many fellow boarders are saying IPO is priced at 50 PE. But isnt it considering Mar-16 results?
EPS for 9MFY17 is 6.90 as reported in RHP on Feb-22-2017. (Please correct me if I am wrong.) Can it be annualised as 9.2, making PE 32.5 (=299/9.2) ?

(vivek naik) #40

the pe conservatively is now 65!

(Krishnendu) #41

Two major concern I have .

  1. Retail Apocalypse in US. Though India is in a growth phase and this situation will at lest take 10-15 years to come.

  2. Amzon india is venturing into Indian Food Retail market. Which is definitely a concern.

Can any one do the impact assessment of this ?

(Vivek) #42

I dont think people have to be worried about these issues, the fact is that the business itself was grown in hard times when online giants like flipkart etc have grown in India. So I dont see any issues with the business going the Long term 5-10 years. There is enough room for growth and it will grow. Everyone is 100% sure that the price will come down when thats the case it wont happen :slight_smile: Take a long term view you should get the benefit of holding the company.
You shouldnt be too much worried about the noise that people make if you are convinced with your research on the investment made stick on to it. Give it time and it will show you results.

(Krishnendu) #43

True but Flipkart or Amazon was not in Food Retail … while Grofers and Bigbusket are newcomer with a very less footprint as of now.