The initial public offering (IPO) of Adani Wilmar, the joint venture between Adani Group and Wilmar Group of Singapore, was subscribed 17.37 times by the afternoon of January 31, the final day of bidding, garnering bids for 212.87 crore equity shares against an offer size of 12.25 crore units.
Qualified institutional investors put in bids for 5.73 times of the portion reserved for them. QIB are vital to a public issue as their portion has to get at least 90 percent subscription.
Retail investors subscribed 3.92 times their part of allotted shares, while the portion set aside for non-institutional investors was booked 56.3 times.
Adani Wilmar has also reserved a part of IPO shares for its employees and shareholders, which has seen a subscription of 51 percent and 33.33 times, respectively.
Incorporated in 1999, Adani Wilmar is an FMCG food company offering most of the essential kitchen commodities, including edible oil, flour, rice, pulses and sugar.
A significant majority of their sales pertains to branded products accounting for approximately 73 percent of their edible oil and food and FMCG sales volume for the financial year 2021.
Also read: Adani Wilmar IPO–Should You Subscribe?
The maiden public offer aims to fetch the company Rs 3,600 crore, which is entirely a fresh issue. The price band for the offer, which opened for bidding on January 27, has been fixed at Rs 218-230 per share.
"The post-issue trailing twelve months price/earnings (TTM P/E) works out to 37.6x (at the upper end of the issue price band), which is reasonable considering Adani Wilmar's historical topline and bottomline CAGR of around 13 percent and around 39 percent respectively over FY19-21," said Amarjeet Maurya, AVP-Mid Caps at Angel One.
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Adani Wilmar has a strong brand recall, wide distribution, better financial track record and healthy return on equity (RoE). "We believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue," he said.
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