The initial public offering (IPO) of edible oil major Adani Wilmar Limited received 17.37 times subscription on the last day of offering on Monday. The initial share sale, that opened on Thursday, is in a price range of ₹218-230 per share. Adani Wilmar had raised ₹940 crore from anchor investors ahead of its public issue.
As of day 3 of the bidding, the category for Retail Individual Investors (RIIs) was subscribed 3.92 times, BSE data showed.
The public issue of up to ₹3,600 crore comprises fresh issue of equity shares and there will not be any secondary offering. The company plans to use its proceeds from the issue to fund capital expenditure, repayment of debt and funding strategic acquisitions and investments.
As per market observers, Adani Wilmar shares premium (GMP) are available at ₹25 in the grey market today. The company's shares are expected to list on stock exchanges BSE and NSE on February 8, 2022.
“Adani Wilmar has strong brand recall, wide distribution, better financial track record and healthy ROE. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue," said Angel One in a note.
Adani Wilmar, a 50:50 joint venture company between Gautam Adani-led congolomerate Adani group and Singapore's Wilmar group, sells cooking oils under the Fortune brand. Apart from cooking oils, it sells food products like rice, wheat flour, and sugar. It also sells non-food products like soap, handwash, and sanitisers.
“At higher price band of ₹230, AWL is demanding a P/E multiple of 37.5x, 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. Thus considering the above observations, we assign a 'SUBSCRIBE' rating for the issue," said analysts at Choice Broking.
