Vishal Mega Mart Shares Tumble 8% Following Massive INR 10,488 Crore Block Deal

Following a significant block transaction by its promoter company, Samayat Services LLP, Vishal Mega Mart shares dropped 4% on June 17. Through a block sale of INR 10,000–10,500 crore, Samayat Services LLP, supported by Partners Group and Kedaara Capital, sold off about 20% of its equity, lowering the promoter ownership from 74.5% to roughly 55–60%.

The transaction, which took place soon after the pre-IPO lock-in period ended, suggests a calculated withdrawal by private equity investors, according to SEBI-registered analyst A&Y Market Research.

In India, Vishal Mega Mart is a multifaceted retailer that mostly functions as a chain of hypermarkets. Their main focus is on offering middle-class and lower-middle-class consumers a large selection of goods at reasonable costs.

They sell goods under the headings of clothing, general merchandise, and fast-moving consumer goods (FMCG), which includes household necessities, consumables, and personal care products.

Significant Shift in Company’s Ownership Structure

The ownership structure of the business has undergone a significant change, even though promoters still possess a majority share.

After successfully retesting the INR 114 support level, Vishal Mega Mart has surged higher on good volumes, indicating bullish momentum, according to A&Y Market Research.

Buyer strength above INR 115 was confirmed by the stock's extended upward trend. A&Y Market Research has recommended setting a stop-loss at INR 113 and has set mid- to-long-term goals for the stock at INR 133, INR 140, and INR 146.

Thumping Performance in FY25

Driven by aggressive expansion and robust consumer demand, Vishal Mega Mart produced a strong operational performance in FY25. With revenues up 23% year over year and net profit up 88%, the company's financial performance in Q4 FY25 was strong.

With the addition of 85 more stores throughout the year, including 28 in Q4 alone, the company now has 696 locations in 458 cities. The gain in same-store sales was equally significant, averaging 11.8% for the entire year and 13.4% for the fourth quarter.

According to A&Y Market Research, return measures are still strong, with return on equity (ROE) hovering around 8% and return on capital employed (ROCE) above 11%. But the research firm highlighted that the bloated valuations are still a problem.

There is little margin for mistake because the company trades at a high 92x price-to-earnings (P/E) and 9x price-to-book (P/B) ratio. Furthermore, historical margin volatility—particularly in FY24—may raise concerns for investors who are risk averse.

The A&Y Market Research has advised traders to keep an eye on the company's FII/DII activities, clues about promoter reinvestment, and general emotions. Retail sentiment turned "extremely bullish" amid "extremely high" message volumes, according to data from Stocktwits.