DMart Credit Rating | Avenue SuperMarts Credit Score |

DMart Credit Rating (Avenue SuperMarts) is provided below along with the basis for this Credit Score. DMart is Planning to raise around Rs.2,500 Crore through the IPO. For arriving at DMart Credit Rating, Total Bank Loan Facilities Rated are Rs.7500 Million. Avenue SuperMarts (DMart) has filed Draft Red Herring Prospectus with Securities and Exchange Board of India and an IPO is expected in fiscal 2017. Post the IPO, promoter shareholding is expected to come down by minimum 10% to about 81% from about 91% currently. The Credit Rating of DMart is Positive.

DMart Credit Rating Avenue SuperMarts Credit Score

Long Term Instruments Credit Rating Details:

  • Rs. 2000 million Non Convertible Debenture
  • Rs. 3000 million Non Convertible Debenture
  • Rs. 1230 million Working Capital Facility
  • Rs. 1364.9 million Proposed Working Capital Facility
  • Rs. 3905.1 million Term Loan Facilities
  • Rs. 1000 million Proposed Term Loan
  • Rs. 3000 million Non Convertible Debenture

Short Term Instruments Credit Rating Details:

  • Rs. 700 million Commercial Paper

DMart (Avenue SuperMarts) Credit Rating:

Category Credit Rating
Short Term* AA-
Long Term* A1+

 

Avenue Supermarts Limited Credit Rating outlook revised to ‘Positive’, ratings reaffirmed

Total Bank Loan Facilities Rated Rs.7500 Million
Long Term Rating CRISIL AA-/Positive (Outlook revised from ‘Stable’ and rating reaffirmed)

 

Rs.2000 Million Non Convertible Debentures CRISIL AA-/Positive (Outlook revised from ‘Stable’ and rating reaffirmed)
Rs.3000 Million Non Convertible Debentures CRISIL AA-/Positive (Outlook revised from ‘Stable’ and rating reaffirmed)
Rs.3000 Million Non Convertible Debentures CRISIL AA-/Positive (Outlook revised from ‘Stable’ and rating reaffirmed)
Rs.700 Million Commercial Paper Programme CRISIL A1+ (Reaffirmed)

 

Revised Credit Rating for Avenue Supermarts Ltd (DMart)

CRISIL has revised its outlook on the long-term bank loan facilities and debt programmes of Avenue Supermarts Ltd to ‘Positive‘ from ‘Stable’ while reaffirming the rating at ‘CRISIL AA-‘. The rating on commercial paper programme has been reaffirmed at ‘CRISIL A1+’.

The revision in outlook reflects CRISIL’s belief that Avenue SuperMarts will maintain steady improvement in its business profile over the medium term driven by increase in its scale of operations, and gradual expansion in new geographies.

High Growth led to better Credit Rating for DMart

Avenue SuperMart’s strong double digit like-to-like growth and fast ramp up of new stores will lead to higher-than-industry revenue growth over the medium term. Avenue SuperMart’s revenue registered a compound annual growth rate of 40% between fiscal 2012 and fiscal 2016, while operating profit before depreciation, interest, and tax (OPBDIT) margin improved to over 7.8% from 6.2% over the same period.

Furthermore, profitability is expected to benefit from increasing proportion of stores that are broken-even and consistent improvement in store productivity. Over the medium term, financial risk profile of the company is expected to improve due to lower dependence on external borrowings for its capital expenditure (capex) due to increase in cash generation.

Avenue SuperMart, operates under D-Mart brand, has an established market position in organised food and grocery retail in India with an area of 3.4 million as on September 15, 2016 and highest revenue per square feet in the industry.

Avenue SuperMart’s stores continued to grow at a healthy pace of over 20% like-to-like growth, reflecting its increasing market share in its catchment areas. Furthermore, notwithstanding Avenue SuperMart’s positioning as a value-for-money retailer, the aggregate revenue per square foot is about 50% higher than most retailers in the same segment.

D-Mart’s strong brand also helps new stores ramp up faster and break even within six months on average as compared with the industry benchmark of 12 to 18 months for new store break-even.

Demonetisation effect on Credit Rating

The recent demonetization move by the Indian government is likely to marginal impact Avenue SuperMart’s performance in November 2016 and revenues are expected to normalize from December 2016 onwards due to non-discretionary nature of products. DMart Credit Rating is one of the best in the Industry.