Adani Wilmar IPO: Share price could double in long term; Ventura assigns 'subscribe,' says it is a proxy play in packaged foods segment

Adani Wilmar IPO (Initial Public Offerings) will open on January 27 and close on January 31. The edible oil major has fixed price band of Rs218-230 a share for the three-day offering. Ahead of the IPO launch this week, Brokerage firm Ventura has pegged the price of Adani Wilmar IPO shares to more than double in a year time.  

AWL is a joint venture between Adani Enterprises and the global Wilmar Group catering to essential kitchen commodity. 

As per the brokerage, it is a proxy play on the high growth underpenetrated packaged foods segment and could significantly surge in 24 months.  

See Zee Business Live TV Streaming Below:

A joint venture between Adani Enterprises and the global Wilmar Group catering to essential kitchen commodity requirements of Indian consumers, the company's flagship brand, "Fortune", is the largest selling edible oil brand in India.  

It has 22 manufacturing facilities, comprising 10 crushing units and 18 refineries, located across 10 states in India. The Mundra refinery, with a capacity of 5,000 MTPD, is India’s largest single-location refinery.  

"By FY24 the FMCG revenue share is expected to climb to ~7.4% (+220 bps) leading to EBITDA/PAT growth of 23.4% / 19.9% to INR 2,491 cr/ 1,253 cr respectively by FY24. We initiate with a Subscribe for long term with a 24-month price target of INR 468.8 per share (48.6X FY24 earnings) representing an upside potential of 103.8% from the issue price upper band at INR 230/share. Post the INR 3,600 cr public offering, the promoter’s holding will stand reduced to 87.95%, " said Ventura in its IPO note.  

The bidding for anchor investors will start on January 25 for the Rs 3,600-crore initial share sale. 

Earlier, Adani Wilmar has cut the size of its initial share sale to Rs 3,600 crore from the Rs 4,500 crore planned earlier.    

The issue comprises fresh issue of new equity shares of face value of Rs 1 for an amount of up to Rs 3,600 crore, the filing said.   

Adani Wilmar Ltd, which is having an annual revenue of Rs 37,195 crore, plans to aggressively look at M&A (Merger and Acquisition) prospects in the foods space.