Supermarket chain Patel Retail files draft papers with Sebi to raise funds via IPO

The offer includes a reservation for subscription by eligible employees.As per the draft papers filed on Friday, the company said that proceeds from the fresh issuance to the tune of Rs 60 crore will be used for payment of debt, Rs 115 crore for funding of working capital requirements of the company, besides a portion will be used for general corporate purposes.Patel Retail was established in 2008, launching its inaugural store in Ambernath, Maharashtra.

Supermarket chain Patel Retail Ltd has filed preliminary papers with capital markets regulator Sebi to garner funds through an initial public offering (IPO).

The IPO is a mix of a fresh issue of 90.18 lakh shares and an offer for sale (OFS) of up to 10.02 lakh shares of promoters, according to the draft red herring prospectus (DRHP).

As per merchant banking sources, the IPO size has been pegged at Rs 250 crore to Rs 325 crore.

The OFS consists of the sale of equity shares of up to 7.68 lakh by Dhanji Raghavji Patel and up to 2.34 lakh equity shares by Bechar Raghavji Patel. The offer includes a reservation for subscription by eligible employees.

As per the draft papers filed on Friday, the company said that proceeds from the fresh issuance to the tune of Rs 60 crore will be used for payment of debt, Rs 115 crore for funding of working capital requirements of the company, besides a portion will be used for general corporate purposes.

Patel Retail was established in 2008, launching its inaugural store in Ambernath, Maharashtra. Since then, it has expanded its operations throughout the suburban regions of Thane and the Raigad district in Maharashtra. The company provides a diverse range of products including food, non-food items (FMCG), general merchandise, and apparel to meet the needs of families. It operates in tier-III cities and nearby suburban areas under the brand ''Patel's R Mart''.

As of December 31, 2023, the company operated and managed 31 stores.

Patel Retail compares itself to several listed industry peers, including Avenue Supermarts Ltd, Spencers Retail Ltd, Osia Hyper Retail Ltd, Aditya Consumer Marketing Ltd, Sheetal Universal Ltd, Kovilpatti Lakshmi Roller Flour Mills Ltd, KN Agri Resources Ltd and Madhusudhan Masala Ltd.

The company's revenue from operations during the fiscal year 2023 increased 33 per cent to Rs 1,018.55 crore from Rs 766.16 crore a year ago. Profit after tax grew 44 per cent to Rs 16.38 crore in the financial year 2023 from Rs 11.37 crore in the preceding fiscal.

For the six months ended September 30, 2023, revenue from operations stood at Rs 445.98 crore, and profit after tax stood at Rs 9.78 crore.

Fedex Securities Private Limited is the sole book-running lead manager to the issue.

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