Adani Wilmar: On the second day of the bidding process, Adani Wilmar’s IPO (initial public offering) received a strong investor response and was fully subscribed. Today, January 31, 2022, is the last day for bids for the Adani Wilmar initial public offering. Adani Wilmar is issuing 3,600 crore equity shares in a complete new issue without selling any shares from existing shareholders or promoters.
Subscription Status For Adani Wilmar IPO
Adani Wilmar’s Day 2 offering garnered 1.13 per cent subscriber interest. Against the total issue size of 12,25,46,150 shares, it has received applications for 13,85,77,270 shares. Equity shares totaling Rs 107 crore have been reserved for eligible employees, who will receive a discount of Rs 21 per share during the bidding process.
According to market observers, shares of Adani Wilmar are available at a grey market premium of Rs 40 today, which is Rs 5 less than yesterday’s grey market premium of Rs 45. Despite negative market sentiments, the GMP of the Adani Wilmar IPO has remained steady at around Rs 40 to Rs 45 for the last three days, which is good for the IPO. In the grey market, Adani Wilmar shares were trading at around Rs 65, which means it may list at a premium of around Rs 65 for bulls, and around Rs 40 for bears.
Should You Subscribe
The following is a list of what analysts are recommending to investors considering the IPO. Analysts recommend subscribing to the IPO due to the company’s extensive distribution network, strong position in edible oil, and prospects for further growth.
The Adani Wilmar Company is one of the few large FMCG companies in India that offers most of the basic kitchen commodities such as oil, wheat flour, rice, pulses, and sugar. “The company has differentiated and diversified product portfolio with market-leading brands. Also, the company is one of India’s leading consumer product companies with leadership in edible oil and packaged food business along with strong raw material sourcing capabilities & integrated business model with well-established operational infrastructure and strong manufacturing capabilities,” Hem Securities said. The brokerage has assigned a “subscribe” rating to the public issue.
Analysts at Ventura Securities have rated the IPO ‘Subscribe’ and issued a target price of Rs 468.8 per share (48.6X FY24 earnings), representing an upside potential of 103.8 percent over the upper band price of Rs 230 per share. The brokerage firm believes Adani Wilmar is a proxy play on the underpenetrated packaged foods segment with high growth prospects.
At the end of the previous fiscal year, the ROCP market share for Adani Wilmar’s branded edible oil was 18.30 per cent, making it the country’s number 1 brand of edible oil. Analysts added that Fortune, the company’s flagship brand, was the industry’s fastest growing edible oil brand. “In terms of the valuations, on the higher price band, AWL demands a P/E multiple of 41.8x based on H1FY22 post-issue fully diluted EPS vs industry average of 65x. Considering, AWL’s strong brand recall, wide distribution, better financial track record and healthy ROE, we have a positive view for the IPO,” they added.