Shares of newly listed Adani group firm Adani Wilmar Ltd extended gains for the second session surging over 19 percent on Wednesday on the back of higher volumes. The stock spiked nearly 38 percent in the last two sessions.
During the day, the stock surged as much as 18.7 percent to hit a fresh high of Rs 314.85 a share on the BSE. At 10.22am, it was trading at Rs 314, up 18.4 percent from its previous close.
Analysts say that the stock is available at reasonable valuation as compared to its peers. Adani Wilmar price earnings stands at 37.56x, whereas its peers like Nestle and Britannia Industries are trading at PE of 81.6x and 54.7x.
Though its initial public offering got muted response due to weak local equity markets and after many recent IPOs failed to deliver positive returns on the listing day, the stock advanced nearly 37.8 percent from its issue price. It was listed on Tuesday.
This was the seventh listing of Adani Group firms and now the total market cap of all firms stood at around Rs 11.30 trillion.
Adani Wilmar Ltd, the equal joint venture between Adani Enterprises Ltd and Wilmar International Ltd, and the owner of the Fortune brand of edible oils, has set its issue price at Rs 230 a share. The company raised around Rs 3,600 crore from its public issue.
The proceeds from the issue worth Rs 1,900 crore will be used for capital expenditure, Rs 1,058.90 crore for repayment of debt and Rs 450 crore will be used for funding strategic acquisition and investment.
As of March 2021, the market share of its edible oil stood at 18.3 percent, making Fortune the No 1 edible oil brand in India. The company has also leveraged its brands and distribution network to offer a wide array of packaged foods since 2013, including packaged wheat flour, rice, pulses, besan, sugar, soya chunks and ready-to-cook khichdi.
"Adani Wilmar Limited is well-positioned to gain the expected growth in this industry due to its outstanding product mix, established brand name, robust distribution network, varied client base, and proven financial performance," said Akhil Rathi, Vice President Advisory at Marwadi Shares and Finance Limited.
The company intends to expand its customer base by launching value-added products and strategic acquisitions, as outlined in its objects of the offer, he pointed out.
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