March 6, 2017

IPO
COMPANY
Avenue Supermarts Ltd.
NOTE
REPORT Towering over peers; Valuations at a bargain SUBSCRIBE
View
Issuer Avenue Supermarts Ltd.
Transaction Initial public offering of up to 62.5-63.4  We are optimistic on the business fundamentals of Avenue Supermarts Ltd.
mn. equity shares (face value Rs.10) (ASL), given its; 1) Consistent track record of profitable growth with significant
Type opportunity to scale up; 2) Differentiated business strategy (owned real estate,
Issue Open and March 08, 2017 – March 10, 2017
cluster based positioning); 3) Cost leadership driven by exceptional in-store
efficiency; 4) Strong balance sheet, low W.C. needs and sustainable RoEs of
Close Dates
20%+ and 5) Potential margin levers such as private labels & benefits of scale.
Type of Offering Fresh Issue
 Valuations inexpensive: On the surface, FY17E^ PE/EV.EBITDA multiples of
Total Offer Size Rs18.7 bn
36x/17x may appear expensive. However, considering its track record of growth
Price Band Rs295 – 299 per share (SSG/Revenue CAGR of 25%/40% over FY12-16, 36% in 9MFY17) and the
Total Offer Size 10.02% at higher price band potential for profitable store expansion (FY17^ RoEs at ~29%), valuations are
as % of Post inexpensive. EV/Sales of 1.5x further reinforce our SUBSCRIBE rating.
Issue Capital
About the offer
Share holding pattern (%)
ASL’s IPO is afresh issue of Rs18.7 bn. The company will primarily use the proceeds
Pre-IPO Post-IPO to pay down debt (Rs10.8 bn) and fund store expansion (Rs3.7 bn), with the
Promoter & Promoter Group 91.3% 82.2% remaining funds for general corporate purposes.
Public 8.7% 17.8% Rationale
Total 100.0% 100.0%
 Stellar track record compared to peers: The Indian retail industry has a poor
track record of profitability due to past periods of excessive expansion, leverage
Offer Size available for allocation
and poor execution. D-Mart’s EBIT margins (8%^ vs. peer avg. of 2%) & RoCE
Reservation No. of No. of % of profile (~30%^ vs. peer average of ~4%) rank well above peers historically as
for Shares^ Shares Issue well as presently. Revenue/store has also been robust, increasing at a ~19%
31.3 31.7 50%
QIB~ CAGR over FY12-16 (19% in FY17E), as compared to retailers such as Future
Retail, Shoppers Stop, Spencers and Hypercity which have seen recent SSG’s at
Non 9.4 9.5 15%
Institutional ~12%/6%/8% and 1% respectively.
21.9 22.2 35%  Strategic edge paired with superb execution: ASL has managed to outperform
Retail
its retail peers by way of differentiated strategies combined with excellent
62.5 63.4 100% execution. Key examples include - 1) ASL’s decision to allocate capital to
Total
# All per-share metrics in report based on Upper price Band ~ Company may
purchase its own real estate, as opposed to funding rapid expansion, which
allocate up to 60% Shares of the QIB Portion to Anchor Investors. lowered opex. costs while restraining unfocused expansion. However, this
strategy pays off primarily when location selection is done right, which in this
Financial Summary case it has; 2) The company’s cluster based approach to store expansion has
Year FY13 FY14 FY15 FY16 9MFY17^ also resulted in regional economies of scale, improved customer targeting and
Revenue 33,409 46,865 64,394 85,881 87,840 lower distribution costs and 3) Efficient business model aimed at driving
Growth 51.3 40.3 37.4 33.4 36.4
footfalls via low priced food/FMCG products combined with hyper efficient cost
structure (relentless focus on space utilization, few employees/store, marginal
EBITDA 2,150 3,418 4,590 6,635 7,697 ad/marketing costs). While all these strategies could be attempted by peers, it
EBITDA(%) 6.4 7.3 7.1 7.7 8.8 would require enormous time/resources to implement and would be even
Adj.PAT 939 1,614 2,118 3,213 3,875 more challenging to execute.
EPS(Rs)# 1.5 2.6 3.4 5.1 6.2  Company Brief: Avenue Supermarts Ltd. (ASL), incorporated in 2002, is one of
the largest supermarket chains (D-Mart brand) in India with 118 stores across
PE(x) 198.8 115.6 88.1 58.1 36.3
45 cities. It’s operations are currently concentrated in Maharashtra (63% of
EV/EBITDA(x) 88.4 55.9 42.2 29.6 19.2 sales), Gujarat (19%) and Telangana (10%), which collectively account for 88%
RoE (%) 12.8 18.5 19.7 23.6 28.8 of D-Mart stores. The company sells products in 3 broad segments – Foods
RoCE(%) 14.8 20.6 21.5 24.5 30.4
(53% of sales), FMCG (21%) and General Merchandie & Apparel (26%).
^ ASL’s FY17 ratios, metrics and multiples are based on annualized estimates
 Key Risks: 1) Disruptive forces such as E-commerce in the foods/personal care
derived from 9MFY17 figures ( throughout this report) segments 2) RoEs likely to decline near term due to excess cash from IPO+CFO.


Analyst: Pranoy Kurian, CFA+91-22-4322 1107pranoy.kurian@idbicapital.com

 IPO Note – Avenue Supermarts Ltd.

Strategy + Execution underpin D-Mart’s success

 ASL has managed to outperform its retail peers by way of differentiated strategies combined with excellent
execution. Key examples include –
 1) ASL’s decision to allocate capital to purchase its own real estate, as opposed to funding rapid expansion,
which lowered opex. costs while restraining unfocused expansion. However, this strategy pays off primarily
when location selection is done right, which in this case it has;
 2) The company’s cluster based approach to store expansion has also resulted in regional economies of
scale, improved customer targeting and lower distribution costs and
 3) Efficient business model aimed at driving footfalls via low priced food/FMCG products combined with
hyper efficient cost structure (relentless focus on space utilization, few employees/store, marginal
ad/marketing costs).
 While all these strategies could be attempted by peers, it would require enormous time/resources to
implement and would be even more challenging to execute.

Fig: Return Ratios excellent as capital intensity Fig: Improving EBIT margins the key metric
reduces, operating leverage increases
35% 140000 10%
8.8%
30.4% 9%
120000 7.7%
30% 7.3% 7.1% 8%
100000 6.2% 6.4% 7%
24.5% 28.8% 7.7%
25% 6%
21.5% 80000 6.6%
20.6% 6.1% 5.9% 5%
23.6%
20% 60000 5.1% 4%
4.6%
14.8% 19.7% 40000 3%
18.5%
15% 2%
20000
1%
12.8% 22,086 33,409 46,865 64,394 85,881 117,120
10% 0 0%
FY13 FY14 FY15 FY16 FY17E FY12 FY13 FY14 FY15 FY16 FY17E
RoE RoCe
Total Revenue EBITDA Margins EBIT Margin

Source: DHRP; IDBI Capital Research; FY17 figures Annualized

 Low Gross margins offset by minimal operating costs: The company’s gross margins have historically averaged
~15% due to the nature of the discount foods business. However, the company has offset that with low
employee costs, the lack of rental costs (which is partly offset by higher depreciation) and minimal advertising.
 Capital intensity related to real estate purchases, WC requirements low: ASL’s capex is primarily related to real
estate acquisition for its stores and the renovation/design spending on a new outlet. The W.C requirements of
the business are relatively low, on account of high inventory turnover of 14x (on sales).

2
IPO Note – Avenue Supermarts Ltd.

Fig: Low Gross margins on account of discount foods Fig: Working Capital Requirements modest and
business, Employee costs extremely low stable; Capex on the back of real estate purchases
18% 9%
8%
16% 8%

14% 15.6% 7% 7%
14.7% 15.0% 14.8% 14.9% 6%
14.5%
12% 6%
6% 5% 5%
10%
5%
8%
4% 3% 3%
3% 3%
6% 3%
3% 3%
4%
2.1% 2.1% 1.9% 2.1% 1.7% 1.6% 2%
2%
1%
0%
FY12 FY13 FY14 FY15 FY16 FY17E 0%
Employee Cost Gross Margins FY12 FY13 FY14 FY15 FY16 FY17E
Avg. Capex to Sales Avg. Net W.C/Sales

Source: DHRP; IDBI Capital Research ; FY17 figures Annualized

Pristine Operational Track Record

 Pristine Track Record of profitable growth: ASL’s value offerings and focus on low prices have been a consistent
driver of footfalls to stores. The company over time has managed to increase Bills Cut (Transaction volumes) at
a CAGR of 18% over FY12-16% (26% annualized growth in FY17E). Further, on a per store basis, Bill cut have
grown at a 8% CAGR over the same period (10% annualized growth in FY17E).
 Value growth a key driver for SSSG: Value per transaction has increased at a 10% CAGR over FY12-16 (8% in
FY17E), partly due to food inflation and partly due to a slight increase in general merchandize/apparel sales
(25.2% in FY14, 27.6% in 9MFY17).

Fig: Robust growth in each year Fig: Revenue/Store seeing steady progress upwards
140 1,200 1,200 1097 1.4
1,023 1014
120 958 1.2
1,000 1,000 878
863
785 775 0.93
100 1.0
107 800 800 0.85
684 695 0.78 0.82
0.74
80 571 0.8
85 600 0.64
600
60 442
67 0.6
400 400
40 53 0.4
43
20 200 200
32 0.2
55 62 75 89 110 119 442 571 684 785 863 1,023
0 - 0 -
FY12 FY13 FY14 FY15 FY16 FY17E FY12 FY13 FY14 FY15 FY16 FY17E
Number of Stores (RHS) Revenue/Store p.a. (INR Mn)
Bills Cut (Mn) Revenue/Bill (INR)
Revenue/Store p.a. (INR Mn) Number of Bills Cut/Store(Mn) p.a.
Source: DHRP; IDBI Capital Research; FY17 figures Annualized

 Increase in Revenue/Sq. Foot a sign of improving efficiency: The company’s revenue/sq.ft measure has risen at
a 19% CAGR rate over FY12-16 (18% annualized in FY17E). Besides increased ticket sizes, several measures to
improve throughput in stores via layout changes and product placement have boosted store efficiency, which
bodes well for return ratios.

3
 IPO Note – Avenue Supermarts Ltd.

Fig: SSG of 25% over FY12-16, with growth driven by Fig: Consistent Progress in Revenue/Sq. foot; Newer
increased ticket size and higher footfalls/store stores inching up in size
18% 1,400 40000 35
15.8%
29.9 30.3 30.3
16%
1,200 35000 28.2 28.4 28.5
13.2% 30
14%
11.6% 33,801
1,000 30000
12% 25
9.2% 800 28,675
10% 25000 26,831
20
8% 24,033
5.8% 5.8% 600 20000
5.1% 20,186
6% 15
3.9% 400 15000
4%
14,249 10
200 10000
2%
500 658 830 1,016 3.6
2.7 3.3
0% - 5000 1.8 2.1 5
1.6
FY13 FY14 FY15 FY16
Estimated Revenue/Store (open for 2Y) (INR,RHS) 0 0
FY12 FY13 FY14 FY15 FY16 FY17E
Growth in No. of Bills Cut/Store p.a.
INR Revenue/Sq Foot (LHS) Size of each Store ('000 sq.ft)
Growth in Revenue/Bill (INR p.a.)
Size of each Store ('000 sq.ft)
Source: DHRP; IDBI Capital Research; FY17 figures Annualized

Handily outperforms retail players

 Margins well above retail competitors on the back of lower operating costs
Fig: Consistently high EBIT margins, which are now at Fig: Low employee costs, low real estate costs and
7.7% (V-Marts at 5.7%) high store efficiency a key reason for higher margins
5YAvg. EBIT Margins Employee Costs/Sales
10% 12%

8% 7.3% 10%
D-Mart, 10%
5.6% 9%
6%
7% 8% 7%
8%
4%
1.9%
6%
2%

0% 4%

-2% D-Mart, 2%
-1.6% 2%
-4%
0%
-6% -5.1% D-Mart Trent ABFRL
-8% -7.0%
Spencers Future Retail V-Mart
D-Mart Trent ABFRL Spencers V-Mart Shoppers Stop Shoppers Stop

Source: DHRP; IDBI Capital Research; FY17 figures Annualized

4
IPO Note – Avenue Supermarts Ltd.

 RoCEs a rare sight in the industry

Fig: One of the best track records in the industry, Fig: Current RoCEs extraordinary
despite period of high capex and expansion
FY12-16 Average RoCEs ~FY17E RoCes (pretax,annualized/est.)
30% 26.2% 40%
D-Mart,
D-Mart,
30.4%
18.2%
20% 30%

10% 20%
4.8% 15.3%
13.0%
0% 7.4%
10%
-2.9% 3.1% 2.4%
-3.4%
-10%
0%

-20%
-10%
-20.5%
-30%
-20% -16.2%
D-Mart Trent ABFRL Spencers V-Mart Shoppers Stop
D-Mart Trent ABFRL Spencers

Future Retail V-Mart Shoppers Stop

Source: DHRP; IDBI Capital Research; FY17 figures Annualized

 Inventory Turnover, Lower Net W.C. a key differentiator

Fig: High inventory turnover on the back of robust Fig: Modest WC requirements
footfalls, store utilization
16 FY16 Inventory Turnover (x) Net Working Capital as a % of sales(FY12-16)
D-Mart, 14 18% 17%
14 16%

12 14%
10
12%
10
8 10%
8 8%
7 7 8%
5%
6 6% D-Mart,
4
4 4% 3%
4
2% 1%
2
0%
0 -2% 0%
D-Mart Trent ABFRL
D-Mart Trent ABFRL
Spencers Future Retail V-Mart Spencers V-Mart Shoppers Stop
Shoppers Stop

Company, Issue Details, DRHP Details

 Company background: Avenues Supermarts Ltd (ASL) was incorporated in 2000 by Mr. Radhakishan Damani.
The company operates national supermarkets under the D-Mart brand. ASL has 118 outlets (as of Jan’17) across
45 cities in 9 states+1 union territory.
 Geographical Breakup: Its operations are currently concentrated in Maharashtra (63% of sales), Gujarat (19%)
and Telangana (10%), which collectively account for 88% of D-Mart stores.
 Segmental Contribution: The company sells products in 3 broad segments – Foods (53% of sales), FMCG (20%)
and General Merchandize & Apparel (28%).

5
 IPO Note – Avenue Supermarts Ltd.

Fig: Expansion gradually turning to newer states in Fig: Maharashtra, Karnataka the most lucrative stores,
South, Central India although time needed for newer stores to catch up
Revenue/Store by State (INR Mn p.a.)
100% 0 0 1
1 2 4
3 5 1 3 3 1,400
5 3 4
90% 5 7 6
9 7 1,148 1,170
80% 13 1,200
13
14
70% 17 960
22 1,000
26 27
60% 783
800
50%
40% 600 541
30% 40 46
50 58 59 400
20%
10% 200 99
0%
0
FY13

FY14

FY15

FY16

9MFY17
Maharashtra & Daman Gujarat
Maharashtra Gujarat
AP & Telangana Karnataka
Telangana^ Karnataka
Andhra Pradesh Madhya Pradesh M.P. & Chhattisgarh NCR+ Rajastan
Chhattisgarh, NCR, Daman, Rajastan
Source: DHRP; IDBI Capital Research

Fig: 73% of sales from high turnover, daily items; Fig: Foods and Groceries remain vastly
Segmental mix broadly stable underpenetrated

60% FY14 FY15 FY16 9MFY17 45%

FY16 FY20P 40%
53.3% 52.8% 53.1% 52.8%
40%
50% 32.50% 32.50%
35% 32%
30%
30% 27%
40% 25%
25% 22%

27.6%
20%
30% 26.4%
25.2% 25.9%
15% 12%
21.5% 21.2% 20.6% 10%
19.6%
20% 10%
5%
5% 3%

10% 0%

0%
Foods Non Food FMCG General
Merchandise/Apparel

Source: DHRP; IDBI Capital Research, Technopak Report

 Use of Proceeds – Excess cash likely to impact return ratios in near term: On study of the balance sheet,
current CFOs are adequate to finance expansion and working capital needs. However, due to requirements of
the IPO listing, the company will see an infusion of Rs18.7 bn.
 Over FY18-20, Rs10.8 bn will be allocated towards debt repayment, while only Rs3.7 bn will be used for store
expansion. ASL has a modest net debt ratio of ~0.5x and a cost of debt at ~10.5%. Based on current trends,
expect the company to generate excess cash given these IPO proceeds and strong CFO inflows, which could be
RoE dilutive in the short term (even though RoIC could still be strong).

6
IPO Note – Avenue Supermarts Ltd.

Total Amount to be
Schedule of Implementation and
Estimated financed from FY18 FY19 FY20
Deployment of Net Proceeds
Cost Proceeds
Construction Cost for Store 1,787 1,787 397 695 695
Purchase of fit outs for Stores 1,880 1,880 403 738 738
Total 3,666 3,666 800 1,433 1,433
Planned Debt Repayment Schedule 10,800 10,800 6,250 3,200 1,350
Total 14,466 14,466 7,050 4,633 2,783
Source: DHRP; IDBI Capital Research

Valuations
 Valuations inexpensive: On the surface, FY17 annualized PE/EV.EBITDA multiples of ~36x/17x may appear
expensive. However, considering its track record of growth (SSG/Revenue CAGR of 25%/40% over FY12-16, 36%
in 9MFY17) and the potential for profitable store expansion (FY17 annualized RoEs at ~29%), valuations are very
attractive.
 Further, when one evaluates the company on EV/Sales and Price to Book ratios, the valuations are far more
favourable. FY17E EV/annualized Net Sales are at just 1.5x, with the cash infusion boosting EV. P/Book value is
at 4.8x, which is modest given that 1) asset values are likely to be understated and 2) Peers are at similar or
higher levels.
 Risks: 1) Disruption of the foods/grocery market by the E-commerce segment, while unlikely, cannot be ruled
out given their aggressive and fast-evolving nature. 2) It should be noted that RoEs are likely to fall temporarily
on account of excess cash.

Figure: FY17E valuations EV/EBITDA vs. EV/Sales Vs. P/B – Value more apparent
3.5

3.0
Trent

2.5
Current EV/Sales

ABFRL
2.0

1.5 D-Mart
V-Mart

1.0
Future Retail
Shoppers Stop
0.5

0.0
0 5 10 15 20 25 30 35 40
Current EV/EBITDA
Source: Bloomberg consensus; IDBI Capital Research, Size of sphere signifies P/B

7
 IPO Note – Avenue Supermarts Ltd.

Financial summary

 Profit & Loss Account (Rs mn)  Cash Flow Statement (Rs mn)

Year-end: March FY13 FY14 FY15 FY16 9MFY17^ Year-end: March FY13 FY14 FY15 FY16 9MFY17
Net sales 33,409 46,865 64,394 85,881 87,840 PAT 1,044 1,698 2,227 3,288 6,066
Growth (%) 51.3 40.3 37.4 33.4 36.4 Depreciation 458 570 815 984 919
Operating expenses (31,258) (43,447) (59,804) (79,246) (106,859) Chg in working capital -653 -827 -1,520 -686 -2195
EBITDA 2,150 3,418 4,590 6,635 7,697 Other operating activities 422 540 698 885 -997
Growth (%) 55.8 59.0 34.3 44.6 54.7 CF from operations (a) 1,271 1,981 2,220 4,471 3,793
Depreciation (458) (570) (815) (984) (919) Capital expenditure -2,377 -2,706 -4,770 -6,461 -4,658
Chg in investments 69 4 31 -123 -314
EBIT 1,692 2,848 3,775 5,651 6,778
Other investing activities 0 0 0 0 0
Interest paid (426) (557) (724) (908) (907)
CF from investing (b) -2,309 -2,702 -4,739 -6,583 -4,972
Other income 144 158 176 187 192
Equity raised/(repaid) 140 46 326 0 0
Pre-tax profit 1,411 2,449 3,227 4,929 6,063
Debt raised/(repaid) 1,454 1,148 2,634 2,892 2,143
Tax (472) (835) (1,109) (1,716) (2,133)
Dividend (incl. tax) 3 11 5 6 0
Effective tax rate (%) 33.5 34.1 34.4 34.8 35.2
Chg in minorities 0 0 0 0 0
Net profit 939 1,614 2,117 3,213 3,933 Other financing activities -422 -552 -621 -816 -819
Adjusted net profit 939 1,614 2,118 3,213 3,875 CF from financing (c) 1,175 652 2,345 2,082 1,324
Growth (%) 55.4 71.9 31.2 51.7 59.9 Net chg in cash (a+b+c) 137 -68 -174 -30 145
Shares o/s (mn nos) 624.1 624.1 624.1 624.1 624.1
 Financial Ratios
 Balance Sheet (Rs mn)
Year-end: March FY13 FY14 FY15 FY16 9MFY17^
Year-end: March FY13 FY14 FY15 FY16 9MFY17^ Adj EPS (Rs) 1.5 2.6 3.4 5.1 6.2
Net fixed assets 10,428 12,605 16,262 21,752 25,352 Adj EPS growth (%) 55.4 71.9 31.2 51.7 59.9
Investments 159 152 146 275 424 EBITDA margin (%) 6.4 7.3 7.1 7.7 8.8
Other non-curr assets 0 0 2 3 7 Pre-tax margin (%) 4.2 5.2 5.0 5.7 6.9

Current assets 4,333 5,319 7,138 8,972 11,895 RoE (%) 12.8 18.5 19.7 23.6 28.8
RoCE (%) 14.7 20.5 21.3 24.3 30.4
Inventories 2,762 3,783 5,396 6,717 8,477
Turnover & Leverage ratios (x)
Sundry Debtors 133 95 71 84 405
Asset turnover 2.5 2.8 3.1 3.1 2.6
Cash and Bank 616 554 380 351 494
Leverage factor 1.8 1.9 1.9 2.0 1.6
Marketable Securities 0 3 7 19 168
Net margin (%) 2.8 3.4 3.3 3.7 4.4
Loans and advances 821 881 1,283 1,798 2,344 Net Debt/Equity 0.5 0.5 0.6 0.7 0.6
Other Current Assets 1 3 2 4 7 Working Capital & Liquidity ratios
Total assets 14,921 18,076 23,548 31,002 37,678 Inventory days 30 29 31 29 26
Receivable days 1 1 0 0 0
Shareholders' funds 7,895 9,556 11,992 15,204 19,054 Payable days 11 10 7 9 7
Share capital 5,441 5,468 5,615 5,615 5,615
 Valuations
Reserves & surplus 2,455 4,088 6,377 9,589 13,439
Minority Interest 3 - 1 1 3 Year-end: March^ FY13 FY14 FY15 FY16 9MFY17^
Total Debt 4,335 5,115 7,575 10,382 12,421 PER (x) 198.8 115.6 88.1 57.9 36.2
Secured loans 3,712 4,568 7,138 9,085 12,277 Price/Book value (x) 23.6 19.5 15.6 12.2 4.8
Unsecured loans 624 547 437 1,297 144 PCE (x) 133.6 85.4 63.6 44.4 29.3
Other liabilities 335 390 466 560 488 EV/Net sales (x) 5.7 4.1 3.0 2.3 1.5
Curr Liab & prov 2,352 3,016 3,515 4,855 5,712 EV/EBITDA (x) 88.5 55.9 42.2 29.6 17.4
Current liabilities 2,290 2,927 3,335 4,688 5,312 EV/EBIT (x) 112.5 67.1 51.3 34.7 19.8
Provisions 62 89 179 166 400 EBIT/EV Yield (%) 0.9% 1.5% 1.9% 2.9% 5.1%
Total liabilities 7,025 8,521 11,556 15,798 18,624 ^ASL’s FY17 ratios, metrics and multiples are based on annualized estimates derived from
9MFY17 figures
Total equity & liabilities 14,921 18,076 23,549 31,002 37,678
Book Value (Rs) - - - - -
Source: Company; IDBI Capital Research

8
IPO Note – Avenue Supermarts Ltd.

Notes

Dealing (91-22) 6637 1150 dealing@idbicapital.com

Key to Ratings
Stocks:
BUY: Absolute return of 15% and above; ACCUMULATE: 5% to 15%; HOLD: Upto ±5%; REDUCE: -5% to -15%; SELL: -15% and below.

IDBI Capital Markets & Securities Ltd. (Formerly known as “IDBI Capital Market Services Ltd.”)
Equity Research Desk
3rd Floor, Mafatlal Centre, Nariman Point, Mumbai – 400 021. Phones: (91-22) 4322 1212; Fax: (91-22) 2285 0785; Email: info@idbicapital.com
SEBI Registration: BSE & NSE (Cash & FO) – INZ000007237, NSDL – IN-DP-NSDL-12-96, Research – INH000002459, CIN – U65990MH1993GOI075578
Compliance Officer: Christina D’souza; Email: compliance@idbicapital.com; Telephone: (91-22) 4322 1212

Disclaimer
This document has been prepared by IDBI Capital Markets & Securities Ltd (formerly known as “IDBI Capital Market Services Ltd.”) (“IDBI Capital”) and is meant for the recipient only for use as
intended and not for circulation. This document should not be reproduced or copied or made available to others. No person associated with IDBI Capital is obligated to call or initiate contact with
you for the purposes of elaborating or following up on the information contained in this document. The Report and information contained herein is strictly confidential and meant for solely for the
selected recipient and may not be altered in any way, transmitted to copied or distributed, in part or in whole , to any other person or to the media or reproduced in any form, without the prior
written consent of IDBI Capital.
Recipients may not receive this report at the same time as other recipients. IDBI Capital will not treat recipients as customers by virtue of their receiving this report.
The information contained herein is from the public domain or sources believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be
fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or re presented that it is accurate or complete and it should not be relied
upon as such. In so far as this report includes current or historical information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed.
Opinions expressed are current opinions as of the date appearing on this material only. While we endeavor to update on a reasonable basis, the information discussed in this material, IDBI Capital,
its directors, employees are under no obligation to update or keep the information current. Further there may be regulatory, compliance, or other reasons that prevent us from doing so.
Prospective investors and others are cautioned that any forward-looking statements are not predictions and may be subject to change without notice.
IDBI Capital, its directors and employees and any person connected with it, will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including
notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report.
This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behaviour of investors or recipients or provide any investment/tax advice.
This report is for information only and has not been prepared based on specific investment objectives. The securities discussed in this report may not be suitable for all investors. Investors must
make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis.
Trading in stocks, stock derivatives, and other securities is inherently risky and the recipient agrees to assume complete and full responsibility for the outcomes of all trading decisions that the
recipient makes, including but not limited to loss of capital.
Opinions, projections and estimates in this report solely constitute the current judgment of the author of this report as of the date of this report and do not in any way reflect the views of IDBI
Capital, its directors, officers, or employees.
This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such
distribution, publication, availability or use would be contrary to law, regulation or which would subject IDBI Capital and associates to any registration or licensing requirement within such
jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are
required to inform themselves of and to observe such restriction.
E-mail is not a secure method of communication. IDBI Capital Markets & Securities Ltd (formerly known as “IDBI Capital Market Services Ltd.”) cannot accept responsibility for the accuracy or
completeness of any e-mail message or any attachment(s).
This transmission could contain viruses, be corrupted, destroyed, incomplete, intercepted, lost or arrive late. IDBI Capital, its directors or employees or associates accept no liability for any damage
caused, directly or indirectly, by this email.

9
 IPO Note – Avenue Supermarts Ltd.

Analyst Disclosures
I, Pranoy Kurian, hereby certify that the views expressed in this report accurately reflect my personal views about the subject companies and / or securities. I also certify that no part of my
compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.

Other Disclosures
IDBI Capital Markets & Securities Ltd (formerly known as “IDBI Capital Market Services Ltd.”) “IDBI Capital” was incorporated in the year 1993 under Companies Act, 1956 and is a wholly owned
subsidiary of IDBI Bank Limited. IDBI Capital is one of India’s leading securities firm which offers a full suite of products and services to individual, institutional and corporate clients namely Stock
broking (Institutional and Retail), Distribution of financial products, Merchant Banking, Corporate Advisory Services, Debt Arranging & Underwriting, Portfolio Manager Services and providing
Depository Services.
IDBI Capital registered trading and clearing member of BSE Ltd. (BSE) and National Stock Exchange of India Limited (NSE). IDBI Capital is also a SEBI registered Merchant Banker, Portfolio Manager
and Research Analyst.
IDBI Capital is also a SEBI registered depository participant with National Securities Depository Limited (NSDL) and is also a Mutual Fund Advisor registered with Association of Mutual Funds in
India (AMFI).
IDBI Capital Markets & Securities Ltd. (formerly known as “IDBI Capital Market Services Ltd.”) and its associates (IDBI Bank Ltd. (Holding Company), IDBI Intech Ltd. (Fellow Subsidiary), IDBI Asset
Management Ltd. (Fellow Subsidiary) and IDBI Trusteeship Services Ltd. (Fellow Subsidiary).
IDBI Group are a full-serviced banking, integrated investment banking, investment management, brokerage and financing group. Details in respect of which are available on www.idbicapital.com
IDBI Capital along with its associates are leading underwriter of securities and participants in virtually all securities trading markets in India. We and our associates have investment banking and
other business relationships with a significant percentage of the companies covered by our Research Department. Investors should assume that IDBI Capital and/or its associates are seeking or will
seek investment banking or other business from the company or companies that are the subject of this material. IDBI Capital generally prohibits its analysts, persons reporting to analysts, and
their dependent family members having a financial conflict of interest in the securities or derivatives of any companies that the analysts cover.
Additionally, IDBI Capital generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of an y companies that the analysts cover.
Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions
expressed herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these
materials, you should be aware that any or all of the foregoing, among other things, may give rise to real or potential conflicts of interest. Additionally, other important information regarding our
relationships with the company or companies that are the subject of this material is provided herein.
This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. We are not soliciting
any action based on this material. It is for the general information of clients of IDBI Capital. It does not constitute a personal recommendation or take into account the particular investment
objectives, financial situations, or needs of individual clients.
Before acting on any advice or recommendation in this material, clients should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice. The
price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not
a guide for future performance, future returns are not guaranteed and a loss of original capital may occur.
We and our associates, officers, directors, and employees, including persons involved in the preparation or issuance of this material, may from time to time have “long” or “short” positions in, act
as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. For the purpose of calculating whether IDBI Capital Markets & Securities Ltd (formerly known
as “IDBI Capital Market Services Ltd.”) and its associates holds beneficially owns or controls, including the right to vote for directors, 1% of more of the equity shares of the subject issuer of a
research report, the holdings does not include accounts managed by IDBI Asset Management Company/ IDBI Mutual Fund.
IDBI Capital hereby declare that our activities were neither suspended nor we have materially defaulted with any Stock Exchange authority with whom we are registered in last five years. However
SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advise letters or levied minor penalty on IDBI Capital for certain operational
deviations. We have not been debarred from doing business by any Stock Exchange / SEBI or any other authorities; nor has our certificate of registration been cancelled by SEBI at any point of
time.
IDBI Capital, its directors or employees or associates, may from time to time, have positions in, or options on, and buy and sell securities referred to herein. IDBI Capital or its associates, during the
normal course of business, from time to time, may solicit from or perform investment banking or other services for any company mentioned in this document or their connected persons or be
engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or
their affiliate companies or act as advisor or lender / borrower to such company(ies)/associates companies or have other potential conflict of interest.
This report may provide hyperlinks to other websites. Except to the extent to which the report refers to the website of IDBI Capital, IDBI Capital states that it has not reviewed the linked site and
takes no responsibility for the content contained in such other websites. Accessing such websites shall be at recipient's own risk.
IDBI Capital encourages the practice of giving independent opinion in research report preparation by the analyst and thus strives to minimize the conflict in preparation of research report.
Accordingly, neither IDBI Capital nor Research Analysts have any material conflict of interest at the time of publication of this report.
We offer our research services to primarily institutional investors and their employees, directors, fund managers, advisors who are registered with us. The Research Analyst has not served as an
officer, director or employee of Subject Company.
We or our associates may have received compensation from the subject company in the past 12 months. We or our associates may have managed or co-managed public offering of securities for
the subject company in the past 12 months. We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company
in the past 12 months. We or our associates may have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the
subject company in the past 12 months. We or our associates may have received any compensation or other benefits from the Subject Company or third party in connection with the research
report.
Research Analyst or his/her relative’s may have financial interest in the subject company. IDBI Capital Markets & Securities Ltd (formerly known as “IDBI Capital Market Services Ltd.”) or its
associates may have financial interest in the subject company. Research Analyst or his/her relatives does not have actual/beneficial ownership of 1% or more securities of the subject company at
the end of the month immediately preceding the date of publication of Research Report. IDBI Capital or its associates may have actual/beneficial ownership of 1% or more securities of the subject
company at the end of the month immediately preceding the date of publication of Research Report. The Subject Company may have been a client during twelve months preceding the date of
distribution of the research report.
Price history of the daily closing price of the securities covered in this note is available at bseindia.com, nseindia.com and economictimes.indiatimes.com/markets/stocks/stock-quotes.

10