Adani Wilmar | The company made its debut on the bourses on February 8. The issue price has been fixed at Rs 230 per share.
FMCG food company Adani Wilmar made a subdued debut on February 8 with the stock listing at a 4 percent discount to the issue price before revving up seven percent.
The stock opened at Rs 221 on the BSE and Rs 227 on the National Stock Exchange against an issue price of Rs 230.
The Rs 3,600-crore public issue had seen good response from investors as it was subscribed 17.37 times during January 27-31, 2022. The portion set aside for non-institutional investors and shareholders were subscribed 56.30 times and 33.33 times respectively, while the allotted quota of retail investors and qualified institutional buyers booked 3.92 times and 5.73 times respectively.
Incorporated in 1999, as a joint venture between the Adani Group and the Wilmar Group, Adani Wilmar offers a wide array of packaged foods, including edible oil, wheat flour, rice, pulses, besan, soya chunks, ready-to-cook khichdi and sugar, under a diverse range of brands to cater to various price points, including "Fortune", the flagship brand, which is the largest selling oil brand in India.
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The company also offers personal hygiene products, including soaps, handwash & sanitizers and various industry essentials, including oleochemicals, castor oil and its derivatives and de-oiled cakes.
Spend on the essential kitchen commodities accounts for 23 percent of the total spend on food & grocery (Rs 39.45 lakh crore), thereby presenting an opportunity size of Rs 9 lakh crore for any player in the essential kitchen commodity segments.
All brokerages had assigned a 'subscribe' rating to the maiden public issue of Adani Wilmar citing reasonable valuations.
"In terms of valuations, the post-issue 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 & bottomline CAGR of around 13 percent and around 39 percent respectively over FY19-21. Further, Adani Wilmar has strong brand recall, wide distribution, better financial track record and healthy return on equity. 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.
Choice Broking had also assigned a subscribe rating for the issue. "At higher price band of Rs 230, Adani Wilmar is demanding a P/E multiple of 37.5x (to its TTM earning of Rs 6.1), which is at discount to peer average of 57.6x. Its edible oil business is likely to have a secular growth trend, but there is a huge untapped market for its Food & FMCG business segment," it reasoned.
Adani Wilmar clocked healthy financials in previous years as per details available in the prospectus. It clocked a 58 percent growth in consolidated profit in FY21 at Rs 727.65 crore and 25 percent growth in revenue at Rs 37,090.42 crore compared to previous year.
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