India’s financial landscape is exploding with extremes. On one side, value retail chains like Vishal Mega Mart, V-Mart, and V2 Retail are riding an unprecedented growth wave, pulling millions of consumers into stores like never before. On the other, a small drone company, DroneAcharya Aerial Innovations, has been exposed for creating a mirage of success, leaving investors burned and regulators intervening.
From record-breaking revenues and aggressive store expansions to IPO manipulations and fraudulent financial claims, these two stories capture the full spectrum of India’s markets—where opportunity and risk collide at lightning speed. In this article, we break down exactly what’s driving retail growth, who’s winning, who’s struggling, and how investor vigilance could have prevented one of the year’s most shocking corporate scandals.
The Value Retail Boom
India’s value retailers delivered one of their strongest quarters in years, fueled by a sudden, sector-wide rise in demand that shattered several years of calm. To understand what happened beneath the surface, three companies provide a clear lens: Vishal Mega Mart, V-Mart, and V2 Retail. Each promises affordable, acceptable-quality apparel and daily goods for lower-middle-class households—yet their growth paths differ dramatically.
Seasonality Distorted the Numbers
Year-on-year comparisons are complicated by timing anomalies. This year’s festive season started early, pulling demand into the September quarter. Festivals like Durga Puja and Navratri, which typically fall in mid-October, landed in late September, driving purchases forward. Retailers with heavy presence in eastern India—such as V2 and Vishal Mega Mart—saw a shift in sales that normally arrive during the December quarter.
Customer behaviour added another twist. Since Diwali arrived sooner this year, buyers gravitated toward lighter, summer-style clothing instead of premium winter wear. At the exact moment when demand peaked, the average selling price softened.
Three Retailers, Three Distinct Outcomes
Vishal Mega Mart — The Steady Leader
Vishal Mega Mart operated as the sector’s most stable performer. Revenue climbed by roughly 22% year-on-year, nearing ₹3,000 crore. Two pillars drove this growth: about 100 new stores added over the year and a 12.8% increase in sales per existing store. Margins stood highest in the segment, with an after-tax profit margin of 5.4%, an impressive figure for a low-ticket retailer.
V-Mart — Emerging From a Difficult Phase
V-Mart also recorded about 22% growth in revenue, crossing ₹800 crore. Nearly 70 new stores and an 11% jump in same-store sales supported this rise. But profitability remains fragile. An accounting effect under IND-AS 116 inflated EBITDA margins to 9%, while the margin without lease accounting adjustments fell to roughly 0.5%, resulting in a ₹9 crore loss. Still, this was far better than the prior year.
V2 Retail — The Breakout
V2 delivered the most dramatic performance. Revenue surged around 86% year-on-year, hitting ₹710 crore. Same-store sales rose 10%, but the real driver was store expansion: 43 new outlets in a single quarter, meaning one in every six V2 stores opened in just three months. Margins stood at 12%, or about 6% without IND-AS 116, helping V2 record over ₹17 crore in after-tax profit.
At a broader level, Vishal Mega Mart remained the market’s strongest and most profitable ship. V-Mart showed signs of recovery, while V2 accelerated aggressively, challenging incumbents.
What Shapes the Value Retail Industry
Expansion Is the Central Weapon
Growth is being driven not just by stronger existing stores, but by relentless store rollouts. The economics appear favourable: V2 claims that new outlets hit breakeven in their first month, with sales per square foot exceeding ₹750 against a breakeven point of ₹500.
Yet expansion cannot be arbitrary. Retailers must decide whether to deepen existing territories or enter new ones:
- Vishal Mega Mart expands through regional clusters, leveraging distribution networks already in place.
- V2 Retail spreads across underserved geographies, focusing on markets where organised retail remains thin.
Geographical nuance also matters. In Kerala, population density blurs city boundaries. Vishal Mega Mart, recognising this reality, focuses on many smaller stores to increase proximity.
Understanding the Customers
Value retailers cater to a deeply price-sensitive consumer base. A typical visit rarely crosses ₹1,000. Purchasing is episodic, clustering around festivals and weddings. Year-on-year comparisons are therefore unreliable, which is why companies urge investors not to over-react to one strong quarter.
Despite being thrifty, customers care about style. They frequently seek fashionable, stepping-up apparel. The industry must therefore serve two groups at once: first-time consumers entering the spending class, and existing shoppers upgrading to better quality products. This duality means value retail is not merely a commodity business. Deep discounting alone cannot sustain growth—quality and aspirational products matter.
Competition From Deep-Pocketed Players
Large players are now crowding the field:
- Trent’s Zudio has seized attention in affordable fashion.
- Reliance’s Utsa expands aggressively.
- Meesho offers t-shirts at ₹50–₹60, pulling entry-level demand away from physical stores.
Organized retail is no longer replacing informal sellers—it is defending against corporations with immense capital. To survive, brands rely on three levers:
- Pricing: Low markups on entry products to attract first-time buyers.
- Product upgrades: Trendier, higher-quality options for customers who want more.
- Vendor relationships: V2, for example, pays suppliers faster to become the preferred client, even if doing so stresses working capital.
Distribution also matters. Vishal Mega Mart now uses quick-commerce style delivery from many stores, servicing customers within an 8–10 km radius.
The Larger Context
The value retail industry is shaped by everything—festive calendars, weather, rainfall, tax policy, and India’s evolving consumer psychology. Its customers are individuals whose incomes have only recently allowed discretionary spending. They may wait for festivals to shop, but when they do spend, they want something that feels special.
As incomes rise, this customer base will only grow. The decisive question is: which brand will new shoppers encounter first? That answer will determine who wins the sector over the next decade.
The Drone Aacharya Case: From Hype to Regulatory Action
SEBI issued an order against DroneAcharya Aerial Innovations Limited, a listed drone training and drone services firm. On paper, the company trained drone pilots and offered drone-related solutions. According to the regulator, it created a false image of rapid growth, issued misleading financial announcements, and used investor funds in undisclosed ways.
Early Years
DroneAcharya received DGCA approval in 2022. Revenues were modest, and operating cash flows negative. Nothing suggested imminent explosive growth. Even at the IPO launch on BSE’s SME platform, the company did not appear to be a guaranteed success.
Soon after listing, revenues appeared to spike. The company released a constant stream of announcements—orders, partnerships, export deals, defense connections. It began to look like a breakout story. But the numbers never aligned.
Despite huge reported revenues, operating cash flows remained negative. Most IPO funds were spent, but not on the stated objectives. Income did not match the announcements. These inconsistencies triggered deeper scrutiny.
A Pattern of Misrepresentation
Shareholding Tactics Before and After IPO
The company issued a large number of bonus shares and private placements, creating an investor base of 199 pre-IPO holders, including notable public figures. Their entry price per share was extremely low. After listing, announcements helped keep the share price high. Pre-IPO investors quickly exited at large gains.
Sebi did not accuse these investors of wrongdoing, only emphasized how a false appearance of growth created the price environment that enabled profitable exits.
Hidden Related-Party Transactions
Before the IPO, ₹10.6 crore was transferred to Ayam Synergies Private Limited (ASPL), a company owned entirely by DroneAcharya’s promoters. This was never disclosed in the IPO prospectus, nor reported to the audit committee. Post-listing, another ₹20 lakh went to ASPL using public funds.
Misuse of IPO Money
The IPO stated that ₹28 crore would be used to procure drones and accessories from four vendors. In reality, only small amounts were spent on drones. Large sums went to unrelated purchases—laptops, refurbished computers, assembled desktops, 3D printers—grouped under “drone accessories.” Payments totaling ₹12.45 crore were made to vendors never disclosed in IPO documents.
Invoices and contracts supporting these expenditures were often fictitious, inflated, or unsupported. Combined with the transfers to ASPL, the regulator found a systematic concealment of how money moved.
Inflated Revenues
Revenue jumped from ₹3.6 crore in FY22 to over ₹35 crore in FY24, largely attributed to export orders from entities in Qatar and the UK. This was unusual for a small, recently certified training company.
Sebi contacted these foreign customers. Their responses did not align with DroneAcharya’s books. The regulator found:
- Purchase orders and invoices created on the same day
- Announcements made before agreements were accepted
- Foreign remittance attempts rejected by banks
Revenue was recognized without fulfilling obligations, and sometimes without performing the service at all.
Announcements That Created Illusion
DroneAcharya issued 34 market announcements post-listing. In 20 of them, no real business followed. In the rest, revenue was negligible—₹26,000 here, ₹1 lakh there. Presentations were framed to suggest scale and momentum.
One claim promoted a ₹15 crore FPV drone export order from a one-man company. The remittance was rejected. The collapse was never disclosed.
Partnership announcements marketed import-and-resale arrangements as domestic manufacturing initiatives.
The cumulative effect: a business marketed as rapidly expanding, despite little real operational substance.
SEBI’s Action
The regulator has barred the company, its promoter-directors, and several associates from accessing the securities market. Restriction periods range from one to two years, with specific limitations on trading. Additional penalties totaling ₹75 lakh were imposed.
The case highlights a structural vulnerability in small-cap and thematic markets. Thin scrutiny allows narratives to flourish unchecked. When perception replaces reality, public trust erodes—not just in a company, but in markets as institutions.
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Disclaimer
This content is intended for informational and educational purposes only. It does not constitute financial, investment, or legal advice. The companies, stocks, or products mentioned are not recommendations or endorsements. Readers should conduct their own research and consult with a qualified professional before making any investment or business decisions.
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