Vishal Mega Mart shares tumble 8% on block deals; Rs 11,100 cr shares change hands

Shares of Vishal Mega Mart Ltd fell 8 per cent in Tuesday's trade amid reports of block deals on the counter. The stock fell 7.25 per cent to open at Rs 115.85 apiece on BSE. It fell further as the session progressed and was down 7.84 per cent at Rs 115.10 apiece by 9.19 am. On NSE, the scrip clocked a turnover of Rs 11,077.75 crore so far.  

Promoter Samayat Services, which held 74.55 per cent stake in the company as of March 31, was reportedly looking to sell shares worth up to Rs 9,896 crore worth via block deals today, CNBC TV 18 reported. Earlier media reports suggested that the Vishal Mega Mart promoter was likely to sell 10 per cent stake via Rs 5,057-crore block deals.

The floor price was reportedly set at Rs 110 per share, a 11.9 per cent discount to the last closing price. Kotak Mahindra Capital and Morgan Stanley are said to be the advisors for the proposed block trade.

Vishal Mega Mart shares were up 18 per cent year-to-date and 11.68 per cent in the past six months. 

In FY25, the four listed value retailers — Vishal Mega Mart, V-Mart, Style Bazaar, and V2 Retail — reported a combined revenue growth of 24 per cent, driven by a 16 per cent increase in retail area and strong double-digit same-store sales growth (SSSG). V2 Retail (V2REL) stood out with a 60 per cent expansion in store area and 29 per cent SSSG, significantly outperforming its listed peers, who recorded SSSG in the range of 12–13 per cent.

In a note on fashion retailers, MOFSL on Monday said margin profile of value retailers improved, as FY25 blended gross margins for listed companies expanded 50 bps YoY to 29 per cent. This was against 150 bps improvement in Q4, reflecting an improved product mix, higher MRP sales and procurement efficiencies. 

Vishal Mega Mart (VMM) recorded the highest gross margin expansion among peers, rising 80 basis points (bps) year-on-year (YoY) in FY25 — and 180 bps YoY in 4Q — driven by a growing share of private-label brands. Pre-Ind AS EBITDA margin expanded 180 bps YoY to 8.2 per cent, the highest in recent years, supported by improved sourcing (including a higher private-label mix and vendor consolidation), operating leverage, and better inventory turnover, MOFSL said.

MOFSL added that pre-Ind AS operating cash flows surged to Rs 1,000 crore in FY25, up from Rs 400 crore YoY. Despite aggressive store expansion, free cash flow also improved. However, MOFSL noted that the recovery was skewed, with Vishal Mega Mart accounting for 60 per cent of sector revenue and contributing the bulk of profit and cash generation.

In 4QFY25, pre-Ind AS EBITDA margin rose by 230 bps YoY to 6.1 per cent, despite a 40 per cent YoY increase in employee costs, the report added.