Ratnadeep Retail Limited IPO

01At a glance

What the company does — organised retail of fresh produce, FMCG, staples, general merchandise and apparel through two formats: Ratnadeep, comprising neighbourhood supermarkets and premium food stores, and National Mart, a value hypermarket that also offers fashion under Style Mart (AP p.3, AP p.4). It had 190 stores with 1.21 million sq. ft. across 20 cities in Andhra Pradesh, Telangana and Karnataka at March 2026 (AP p.4).

Who pays it — shoppers; the average bill was ₹482.18 in FY26, and Telangana provided 90.78% of revenue (AP p.9, AP p.10). Private labels were 28.23% of FY26 revenue (AP p.9).

Why it is raising money — ₹2,600.30 million to open new Ratnadeep and National Mart stores over FY28 to FY30, ₹400.00 million to repay loans, and the rest for general purposes (AP p.6).

How fast it has grown — revenue from ₹16,800 million in FY24 to ₹19,877 million in FY25 and ₹22,231 million in FY26 (AP p.7).

The one thing to understand — growth now comes almost entirely from the newer value format, while the original stores shrink. Ratnadeep-format revenue was flat at about ₹15,000 million over three years and its same-store sales fell 5.74% and 7.92% in FY25 and FY26, while National Mart grew from ₹1,705 million to ₹7,166 million (AP p.8, AP p.9). The offer is made under Regulation 6(2) because the company did not meet the average operating-profit test (AP p.1).

02The business, in plain words

A supermarket chain buys groceries, fresh produce and household goods from suppliers, stocks them in rented stores, and earns a gross margin on what shoppers take home, from which it pays rent, staff and store costs.

A family in Hyderabad needs its weekly groceries → it shops at a Ratnadeep store near home → it pays at the till → Ratnadeep keeps the margin over what it paid suppliers.

Earnings equation: Profit ≈ store sales × gross margin − staff, rent and store costs − depreciation − interest. Gross margin was 23.30% and EBITDA margin 5.01% in FY26 (AP p.8).

03Where the money comes from

Source: AP p.8, AP p.9.

04The growth record

Source: AP p.7, AP p.8.

05What the growth is made of

National Mart stores. Its revenue more than quadrupled in two years while Ratnadeep's was flat (AP p.9). Store additions slowed from 44 in FY24 to 10 in FY26, and revenue per sq. ft. fell from ₹20,241 to ₹18,373 (AP p.8). Staples and general merchandise gained share from FMCG (AP p.9).

06Earnings quality

The FY25 loss followed depreciation of ₹522.38 million and finance costs of ₹195.89 million, up from ₹75.51 million, as new term loans and new-store leases were added (DRHP p.25). Operating cash flow of ₹1,648.47 million over FY24 to FY26 exceeded profit of ₹258.47 million (our arithmetic, AP p.8). The auditors included matters in annexures to their reports for all three years (AP p.12).

07The balance sheet

Source: AP p.7, AP p.8, DRHP p.59. Lease liabilities are the sum of current and non-current amounts (our arithmetic).

08What the money is for

Source: AP p.6.

09Who is selling

Source: AP p.1, AP p.7. The shares offered are 13.60% of the company (our arithmetic). The sellers' average cost is ₹0.01 a share or less, after a 200-for-one bonus issue in March 2026 (AP p.1, AP p.11).

10Promoters

The promoters are Sandeep Agarwal, Manish Bhartiya, Mitesh Bhartiya, Yash Agarwal and Kavita Agarwal (AP p.5). Two criminal proceedings involving ₹10.09 million are pending against the promoters (AP p.12).

11Who already owns it

Source: AP p.7. The last two rows are our arithmetic. The promoters and promoter group hold all the shares (AP p.7).

12What changed just before the IPO

• Bonus issue — 200 shares for every one held, March 2026 (AP p.11).
• Return to profit — ₹367.01 million in FY26 after the FY25 loss (AP p.7).
• Slower openings — ten stores added in FY26, against 44 in FY24 (AP p.8).

13Capacity and expansion

Capacity is store space: 1.21 million sq. ft. in 190 stores at March 2026 (AP p.8). The proceeds fund new stores between FY28 and FY30 (AP p.6).

14Market size and industry structure

The 1Lattice report cited in the offer document estimates South India's food and grocery market at ₹18.3 trillion in FY2026 and projects ₹31.8 trillion by FY2031 (AP p.5). Those projections are 1Lattice's, and newboard has not tested them.

15Competitive position

What the document claims, and what it rests on:

• Gross margin — the highest among organised peers anchored in food and grocery in FY2026, per the report cited (AP p.3).
• Two formats — premium and value stores (AP p.3).
• Private labels — 28% of revenue (AP p.9).

Against that: one state, falling same-store sales at the main format, thin EBITDA margins, and competition from much larger listed chains (AP p.9, AP p.10, DRHP p.103).

16Peers the company named

Source: DRHP p.103, DRHP p.104.

No P/E is possible for the company until a price band is set.

17Risks, in plain words

• One state. About 91% of revenue from Telangana (AP p.10).
• Old stores. Ratnadeep same-store sales fell two years running (AP p.8).
• Thin margins. EBITDA margin of 2% to 5% (AP p.8).
• Past loss. A ₹266.92 million loss in FY25 (AP p.10).
• Suppliers. No manufacturing of its own (AP p.10).

18Litigation and regulatory matters

Source: AP p.12.

19Related-party transactions

Not read in detail for this study.

20What the offer document does not say

In the sections read for this study, the document does not give:

• Why Ratnadeep-format same-store sales are falling, in the pages read.
• Where the new stores will open, in the pages read.
• What the ten criminal proceedings against the company concern, in the pages read.
• What matters the auditors raised in the annexures, in the pages read.
• The price band, lot size or issue dates, which is normal at DRHP stage.

21Five questions for management

1. Why have Ratnadeep stores lost same-store sales for two years?
2. Is National Mart taking shoppers from Ratnadeep stores?
3. Why are store openings deferred to FY28 and later?
4. How will the company grow outside Telangana?
5. What did the auditors report in the annexures?

2Sources and cited facts

This study was read from 2 documents the company filed. The 28 figures it cites are listed under the document each came from, with the page and the sentence as printed.