Edible oil major Adani Wilmar’s (AWL) public issue, comprising fresh equity shares, has opened for subscription today and conclude on January 31.
The price band of the three day share sale is fixed at ₹218-230 per share. On Tuesday, Adani Wilmar Ltd had raised ₹940 crore from anchor investors ahead of its initial public offering (IPO).
As per market observers, Adani Wilmar shares premium (GMP) are available at ₹44 in the grey market today.
Investors can bid for a minimum of 65 equity shares and in multiple of 65 thereof. The issue can be subscribed till January 31, Monday.
Majority of the brokerages are positive on the issue and have suggested investors to bid for the IPO citing its reasonable valuations, growth plans for the future, robust product line, sound balance sheet and strong parentage.
The company’s shares are expected to list on stock exchanges BSE and NSE on February 8, 2022.
“AWL aspires to become leading packaged food and FMCG company in India and it gets significant benefit from its parent ‘Adani Group’ and JV partner ‘Wilmar International’.
We believe AWL is in sweet spot to take advantage of the prevailing opportunities and can grow multifold.
Hence, we recommend to ‘subscribe for long term gains’,” said KR Choksey in a note.
Adani Wilmar sells cooking oils under the ‘Fortune’ brand. Apart from cooking oils, it sells food products like rice, wheat flour, and sugar.
It also sells non-food products like soap, handwash, and sanitisers.
“Adani Wilmar has strong brand recall, wide distribution, better financial track record and healthy ROE. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue,” said Angel One in a note.
Though, volatility in raw material prices and increase in competition could impact the profitability of the company, the brokerage added.
The proceeds of the public issue will be used to fund capital expenditure, reduce debt and for acquisitions as the company seeks to become India’s biggest food and FMCG company.
On the financial front, Adani Wilmar Ltd’s profit grew to ₹357 crore from ₹288.7 crore for the six months ended September in the current fiscal year whereas revenue increased to ₹24,957 crore as against ₹16,273 crore in the corresponding period of the previous year.