Adani Wilmar shares made a weak listing on exchanges on 8 February 2022, as stocks opened 3.91% down at Rs 221 apiece from issue price at Rs 230 per share.
Adani Wilmar shares made a weak listing on exchanges on 8 February 2022, as stocks opened 3.91% down at Rs 221 apiece from issue price at Rs 230 per share. At listing, the market capitalisation of the company stood at Rs 28,722.90 crore, according to BSE. This is the second company to list on bourses in calendar year 2022, after the AGS Transact Technologies made its stock market debut on 31st January. The public issue of Adani Wilmar comprised only fresh issue of equity shares.
The retail investors section was subscribed 3.92 times, while non-institutional investors bid for 56 times more shares than the 2.15 crore shares reserved for them. Qualified institutional investors put in bids for 5.73 times of the portion reserved for them. Incorporated in 1999 as a joint venture between Adani Group and the Wilmar Group, Adani Wilmar Ltd (AWL) is an FMCG food company offering most of the essential kitchen commodities for Indian consumers, including edible oil, wheat flour, rice, pulses, and sugar. The company’s portfolio of products spans across 3 categories: (i) edible oil, (ii) packaged food and FMCG, and (iii) industry essentials. The company has 22 plants in India, which are strategically located across 10 states, comprising 10 crushing units and 19 refineries.
Research firm Choice Broking had recommended subscribing to the issue. It said that at a 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 added.
Adani Wilmar has been mostly resilient to the fallouts from the Covid pandemic, Reliance Securities said in a report. Despite a dip in the EBITDA margin from 4.4% in FY20 to 3.6% in FY21, the company reported a 62% YoY jump in PAT at Rs 6.6bn, led by the saving in interest cost, which also helped to improve the net margin to 1.8% in FY21, from 1.4% in FY20, it added. Debt-to-equity improved from 0.9x in FY20 to 0.6x in FY21. “For 1HFY22, its revenue jumped by 54% YoY to Rs248bn, with an EBITDA of Rs8bn (up 23% YoY) and PAT of Rs3.3bn (up 36% YoY),” the research firm said.
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