ADANI WILMAR IPO

IPO Details:

Price Band: 218-230

Cutoff Price: 230

About Company:

Adani Wilmar offer 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”, our flagship brand, which is the largest selling oil brand in India. Wilmar also offers personal hygiene products, including soaps, handwash and sanitizers, and various industry essentials, including oleo chemicals, castor oil and its derivatives and de-oiled cakes.

Competitive Strengths:

1. Differentiated and diversified product portfolio with market leading brands to capture large share of kitchen spends across India.

2. Leading consumer product company in India with leadership in branded edible oil and packaged food business.

3. Leading market position in industry essentials.

4. Strong raw material sourcing capabilities.

5. Integrated business model with well-established operational infrastructure and strong manufacturing capabilities.

6. Extensive pan-India distribution network.

7. Focus on environmental and social sustainability.

8. Strong parentage with professional management and experienced board.

Strategies:

1. Become the leading packaged food and FMCG company in India.

2. Further expand the distribution network with an omni-channel approach.

3. Focus on increasing brand awareness.

4. Continue to launch new products and enhance the customer base.

5. Pursue strategic acquisitions.

6. Focus on multiple drivers for margin expansion.

Financial Performance:

Revenue of the company is increasing. Company is profitable and cutoff price is at P/E of 36.

Objects of the Issue:

The Net Proceeds from the Issue are proposed to be utilised in the following manner:

1. Funding strategic acquisitions and investments

2. Funding Capex

3. Repaying Loan

Competitors Comparison:

Considering listed companies that are in same business, Adani Wilmar seems to be overvalued based on the P/E ratio and P/B ratio.

Grey Market Premium:

Our view: GMP of the IPO is decent but overall the company looks overvalued. I will not subscribe to this IPO.

Disclaimer: Views are shared for an educational purpose. Please consult your financial advisor or planner before taking any action based on the views or facts shared on this blog.

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