CAM in Avenue Supermarts’ QIP


Cyril Amarchand Mangaldas (CAM) acted as Indian legal counsel to supermarket chain owner and operator Avenue Supermarts on its ₹40.9 billion (US$567 million) fundraise through a qualified institutional placement (QIP).

The QIP was the largest by an Indian consumer retail company to date. A part of the transaction entailed Avenue Supermarts issuing 20 million equity shares of face value of ₹10 each at a price of ₹2,049 per equity share, including a premium of ₹2,039 per equity share. The issue opened on 5 February 2020 and closed on 10 February 2020.

The transaction team at CAM was led by partner and head of capital markets Yash Ashar, and included partner Abhinav Kumar and principal associate Neha Samant.

IndusLaw was Indian legal counsel to the book running lead managers (BRLM), which comprised Kotak Mahindra Capital, Axis Capital, DSP Merrill Lynch, HSBC Securities and Capital Markets India, IDFC Securities, JM Financial and JP Morgan India. The team included partner Ravi Dubey and senior associate Priyadarshini Rao. Herbert Smith Freehills was international legal counsel to the BRLM.

“Avenue Supermarts [also known as D-mart], one of our old clients with a stellar reputation in the multi-brand retail sector, hired us for its follow-on fundraise involving structuring of a QIP coupled with an offer for sale by its promoters,” Dubey told India Business Law Journal.

Dubey’s team of five partners and 13 associates recently moved from L&L Partners to IndusLaw. At L&L, the team had long consolidated its position as a band-one practice.

“Receiving instruction for a reputed large transaction acts as a stepping stone in affirming our top-tier position in the market, especially when the client turned to us to lead newer and more complex transactions. Since our joining, we have focused on creating a brand [for the firm] in the capital markets space.”

Dubey said of the unique aspects of the transaction: “One of the peculiarities of this deal was participation by foreign investors in the QIP, since multi-brand retail is a regulated sector. To add to the complexity, the Ministry of Finance late last year replaced the longstanding foreign exchange regulations with newly enacted rules governing non-debt instruments. Accordingly, the transaction had to be structured to ensure participation by foreign investors in the QIP to comply with the new set of foreign exchange rules.”

He said the transaction was undertaken “to comply with the minimum public shareholding (MPS) requirements under Indian laws. Since the QIP transaction was aimed at achieving partial MPS, a follow-on transaction was structured through a secondary sale of promoter shares by way of an offer for sale through the stock exchange mechanism.”