Adani Wilmar IPO opens on January 27: Top 10 things to know before edible oil major issue goes live tomorrow

The three-day initial public offering (IPO) of edible oil major, Adani Wilmar Ltd. (AWL), will open for subscription on Thursday, when the NSE and BSE resume regular trading after being closed on account of Republic Day on Wednesday. A leading FMCG company in India, Adani Wilmar Ltd mobilised Rs 939.9 crore from 15 anchor investors on January 25. 

Most of the rating agencies have assigned subscribe rating for this public offer on back of good fundamentals and potential in the underpenetrated packaged foods segment. As the issue opens tomorrow, Thursday—here are top 10 things to know about this issue.  

Adani Wilmar IPO date: Edible oil major IPO will open for subscription on Thursday, January 27 and will close on Monday, January 31.  

Adani Wilmar IPO Price Band: The IPO has set a price band of Rs 218 - 230 per share.  

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Adani Wilmar IPO Issue size: The company aims to mop up Rs. 3,600 crore from this issue. Earlier, edible oil major Adani Wilmar Ltd (AWL) has cut the size of its initial share-sale to Rs 3,600 crore from the Rs 4,500 crore planned earlier. 

Adani Wilmar IPO lot size and bid details: The lot seize consists 65 equity shares. A retail investor can buy a minimum of 65 equity shares (one lot) and in multiples thereof. Maximum Subscription amount for retail investor has been capped at Rs. 2,00,000, while maximum subscription amount for eligible employee has been fixed at Rs. 5,00,000. Maximum bid quantity for QIB Investors is 10,06,00,890 equity shares in multiple of 65 Equity Shares (Calculated at lower end of the Price Band). Maximum Bid Quantity for NIB Investors is 7,18,57,760 equity shares in multiple of 65 equity shares (Calculated at lower end of the Price Band). Similarly, maximum bid quantity for AWL shareholders is 1,65,13,705 equity shares in multiple of 65 equity shares at lower end of the Price Band.   

Adani Wilmar Company Overview  

Incorporated in 1999, the FMCG company offers essential kitchen commodities for Indian consumers, including edible oil, wheat flour, rice, pulses, and sugar. The company also provides various industry essentials, including oleochemicals, castor oil and derivatives, and de-oiled cakes. The company offers products under a diverse range of brands across a broad price spectrum and cater to different customer groups.  

Its product portfolio is categorized into (i) edible oil, (ii) packaged food and FMCG, and (iii) industry essentials. Fortune, the company's flagship brand, is India's largest selling edible oil brand. The company has increased focus on value-added products by launching products such as edible oil products, rice bran health oil, fortified foods, ready-to-cook soya chunks, khichdi, etc. 

Adani Wilmar Company presence  

As per Amarjeet Maurya - AVP - Mid Caps, Angel One Ltd, the company has 22 plants in 10 Indian states, comprising 10 crushing units along with 19 refineries. Its refinery in Mundra is one of the largest single-location refineries in India with a capacity of 5,000 MT per day. Adani Wilmar has also used 36 leased tolling units for additional manufacturing capacities as of September 31, 2021. 

As of September 30, 2021, the company had 5,590 distributors in 28 states and eight union territories, catering to over 1.6 million retail outlets. Furthermore, the company had 88 depots in India, spread across the aggregate storage space of approx. 1.8 million square feet. 

Adani Wilmar IPO Objective 

The company wants to use the money to fund capital expenditure to expand existing manufacturing facilities and develop new manufacturing facilities. The funds will also be used for repayment/prepayment of borrowings, strategic acquisitions and investments, and general corporate purposes. 

Adani Wilmar Financials 

Angel One says the company's revenue has grown at a CAGR of ~13% over FY19-21. "On the profit front, the company has reported a strong Net Profit CAGR of ~39% over the same period. During 1HFY22, the company has reported strong top-line and bottom line growth. However, the company's EBITDA margin was volatile. The overall financial number looks good," it said.  

Adani Wilmar comparison with peer  

Among the listed peers are Marico India and HUL. In terms of valuations, the post-issue TTM PE works out 37.6x (at the upper end of the issue price band), said  

Adani Wilmar IPO book running lead managers: Kotak Mahindra Capital Company Limited, JP Morgan India Private Limited, BofA Securities India Limited, Credit Suisse Securities (India) Private Limited, ICICI Securities Limited, HDFC Bank Limited and BNP Paribas.