Vishal Mega Mart, the largest investee company of Partners Group Private Equity (PEY), has listed on the National Stock Exchange of India (ticker: VMM) and Bombay Stock Exchange in India (ticker: 544307). Its IPO of 1,026m shares was priced at INR 78 per share, giving a fully diluted equity value of INR 370bn. PEY has sold approximately 23% of its underlying investment in Vishal with an uplift of 36% compared to the last published monthly report (31 October 2024) and a distribution of €18.7m.
PEY says that, after Vishal’s first trading day its interest in the company represents an uplift of around 79% to the last published monthly report (31 October 2024) amounting to a total exposure of approximately €97.9m. PEY is not expected to receive proceeds in the short-term for the approximately remaining 77% of its ownership in Vishal, as a lock-up period in connection with the IPO has been agreed upon for pre-IPO stockholders.
Vishal is a one-stop shopping destination for middle- and lower-middle income consumers in India, serving a target market of around 225m households and over 945m individuals. Vishal serves its customers through a pan-Indian network of more than 640 stores with a total footprint of 11.5m sq. ft. of retail space. Vishal offers a diverse range of merchandise across three major product categories: apparel, general merchandise, and fast-moving consumer goods. The company offers its own portfolio of brands alongside third-party brands with a focus on variety, affordability, quality, and convenience. PEY says that the thematic tailwinds that enabled Partners Group to originally build conviction in Vishal’s growth prospects remain in place today. This includes rising economic growth in India leading to higher disposable incomes, accelerating urbanization driving increased footfall at retail outlets, and expanding populations in Tier-2 cities and beyond.
Partners Group’s investment in Vishal took place in 2018. PEY says that Vishal has since demonstrated a period of strong growth, with EBITDA rising over 55% in the last two years and revenues more than 60%. It adds that this reflects the successful execution of several transformational value creation initiatives, including store expansion, double-digit same-store sales growth, and the implementation of operational efficiency improvements.
