Radhakishan Damani may not have been a big name. Not as big or popular as Ambani, Birla or Tata, for sure. The popularity index as well as the financial equation changed drastically on March 21, 2017 when D-Mart’s IPO emerged as a roaring success.
Radhakishan Damani the notoriously media-shy businessman and the brainchild behind D-Mart shot to fame. D-Mart’s stock price, offered at Rs 299, surged more than 100% to Rs 604.4 on the Bombay Stock Exchange. The retail chain can lay claim to the fact that it is one of the most successful IPO listing in recent years.
With a market capitalization of Rs 39,400 crore, D-Mart has surpassed the combined market capitalization of Big Bazaar (Future Group) and the retail business of Aditya Birla Group.
D-Mart has been extremely cautious about the way it has carried out business. While other retail chains have expanded in numerous categories, D-Mart has been content with a restricted product line with main focus on food and groceries. D-Mart has also not ventured into the gamut of private labels, an area where Westside (Trent) has found very exciting.
D-Mart’s business model is very similar to that of Wal-Mart, the International retail behemoth that thrives on EDLP (every Day Low Price) model. Damani’s strategy has been crystal clear. Stock and sell low priced everyday use items at less than MRP. The value proposition will attract buyers and increase sales volumes. The increased sales enable D-Mart to negotiate even better prices from suppliers.
So far, so good! The model has done wonders for D-Mart. The low prices have made way for huge valuations.