E-business of D-Mart expects to reach USD 700 billion by 2020
E-business of D-Mart expects to reach USD 700 billion by 2020

D-Mart, an evolving giant in the retail supermarket chain, with a focus on value retailing, which offers a wide range of products with a focus on foods, FMGC and general merchandise & apparel product categories is planning to rise 1,800 crores by 6,23,93,631 equity shares from this IPO.

The company wants to utilise Rs 10,800.00 million of the net proceeds towards repayment of the term loans and redemption of NCD’s availed by the company. The company wants to utilise Rs 1,879.50 million, out of the net proceeds towards the purchase of the new fit outs for their new stores, which will have an aggregate built-up area of 21,00,000 sq. ft and utilise 1,786.50 million to undertake construction of new stores with an aggregate built-up area of 9,00,000 sq. ft which will be undertaken in the year 2018, 2019 and 2020, respectively. The current D/E is 0.95x.

The Indian retail industry is notorious as a fast-paced industry, due to the entry of numerous new players. It accounts share of 10 per cent in India's GDP and over 8 per cent of employment. India is world’s fifth largest global destination in retail space.

The country's retail market is expected to double to USD 1 trillion by 2020 as this expansion will be aided by urbanization and attitudinal shifts. While the overall retail market is expected to grow at 12 per cent per annum, modern trade would expand and reach the growth rate up to 20 per cent per annum. Whereas, its traditional trade is likely to expand by 10 per cent.

E-business has also revolutionized the retail market, which is expected to reach USD 700 billion by 2020.

Currently, Food & Grocery has major share in retail at 67 per cent and will continue to be leading the market in FMGC sector. It has grown at 33 per cent CAGR from 4bn in 2012 to reach USD 13 bn in 2016 and is expected to grow further at a CAGR of 26 to reach at 31 bn till the end of 2020.

E-retailers are expected to reach at par with physical stores in the next 5 years. India is expected to become the world’s fastest growing e-commerce market, driven by robust growth in investments, majorly from FDI with a sum of USD 537.61 million, as there is a significant rise in the need for consumer goods in different sectors.

Many companies have also invested in Indian retail industry from the year 2000-2016 and rapid growth in internet users. After seeing the potential of retail industry, the government is also taking various initiatives to improve the retail industry in India. For example, the government has allowed 100 per cent FDI investment in retail etc.

The company is planning to develop its network by opening various stores in India, mostly in southern and western cities in India, as it is getting maximum revenue from these regions. The company also intends to strengthen store network in Andhra Pradesh, Telangana, Madhya Pradesh, Karnataka, Chhattisgarh, Tamil Nadu and northern India.

D-Mart's major competitor includes Big Bazaar, Reliance Retail, Spencer’s, Hyper city and Star bazaar as well as the traditional retail stores and others. D-Mart's majorly competing areas include food, FMGC, general merchandise & apparel product categories and also in non-branded clothes etc.

 
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