Jay Ambe Supermarkets IPO

Jay Ambe Supermarkets Limited, incorporated in 2020, is engaged in the retail trading of a wide range of products including FMCG items, groceries (packed and loose), household goods, consumer durables, apparel, footwear, toys, gift articles, and home décor. Operating primarily through a franchise model, the company allows franchisees to use its brand in exchange for an initial setup fee and annual licensing fees. This model enables Jay Ambe to expand its retail footprint efficiently while maintaining brand consistency across locations.

City Square Mart, a retail brand of Jay Ambe Supermarkets, began operations in August 2018 in Kudasan, Gandhinagar, and has grown to 17 stores across Gujarat within six years. As of March 31, 2025, the company employs 132 individuals, including 115 permanent staff across various locations and 17 outsourced personnel from security agencies. With its diverse product offerings and strategic expansion model, Jay Ambe continues to strengthen its presence in the regional retail market.

Jay Ambe Supermarkets IPO Strengths

• The company has shown strong revenue growth from ₹0.22 crore in FY21 to ₹2.42 crore in FY23, reflecting robust business expansion.
• Engages in trading of FMCG materials, groceries, home textiles, home decor, clothing, toys, footwear, and household items, catering to a wide consumer base.
• Headquartered in Gandhinagar, Gujarat, with proximity to major consumer markets and supply chain networks in Western India.
• Maintains stable and robust relationships with suppliers, ensuring consistent inventory availability and supply chain reliability.
• Emphasizes operational efficiency and supply chain improvements to optimize costs and product availability.
• Increasing total assets from ₹7.03 crore in FY21 to ₹18.25 crore in FY23, reflecting investments in business scaling and infrastructure.

Jay Ambe Supermarkets IPO Risks

• The company carries inventory approximately five times its monthly sales, indicating potential challenges in inventory management and working capital strain.
• The franchise-based expansion relies on franchisees maintaining standards and managing operations effectively, posing control and consistency risks.
• Most store locations are rented or leased on short-term contracts, which may be terminated or renewed with unfavorable terms, affecting store continuity.
• Significant working capital requirements, especially for inventory and receivables, may affect liquidity and operational flexibility.
• The retail industry faces intense competition from both organized and unorganized players, potentially affecting pricing power and profitability.
• Sharp declines in material cost ratios raise questions about the sustainability of current profitability levels as market conditions evolve.
• While growing, the brand is still building recognition outside its regional base, which may limit expansion speed.