Patel Retail Files for IPO to Expand Supermarket Chain

Maharashtra-based supermarket chain Patel Retail has taken a significant step by filing preliminary papers with the capital markets regulator SEBI for fundraising through its maiden public issue.

The IPO proposed by Patel Retail consists of a combination of a fresh issue of 90.18 lakh equity shares by the company and an offer-for-sale (OFS) of 10.02 lakh shares by promoters Dhanji Raghavji Patel and Bechar Raghavji Patel. Dhanji Patel intends to offload 7.68 lakh equity shares, while Bechar Patel plans to sell 2.34 lakh shares through the OFS. Additionally, the issue includes a reservation of up to 51,000 equity shares for company employees.

Prior to filing the red herring prospectus with the Registrar of Companies (RoC), Patel Retail stated its consideration for fundraising through alternative means such as private placement, preferential allotment, or rights issue of up to 5 lakh equity shares.

Established in FY08, Patel Retail operates a retail supermarket chain primarily in tier-III cities and nearby suburban areas. The company plans to allocate ₹60 Crore from the net fresh issue proceeds towards debt repayment, ₹115 Crore for fulfilling working capital requirements, and the remaining funds for general corporate purposes. As of December 2023, the Patel family-owned enterprise manages and operates 31 stores.

In terms of financial performance, Patel Retail reported a net profit of ₹16.4 Crore for the fiscal year ended March FY23, marking a notable 44% growth compared to the previous year. Revenue from operations during the same period also saw significant growth, increasing by 33% to ₹1,018.5 Crore.

For the six-month period ended September FY24, Patel Retail achieved a net profit of ₹9.8 Crore on revenue of ₹446 Crore.

Fedex Securities has been appointed as the sole book-running lead manager to the issue, overseeing the IPO process for Patel Retail.