Adani Wilmar share listing today: Analysts expect a reasonable start

The equity shares of Adani Wilmar Limited would be listed and allowed to trade on the BSE and NSE in the list of ‘B’ group of securities in a special pre-open session as of February 8, 2022, according to a BSE notification. Adani Wilmar’s share price has surged on the grey market ahead of its first public offering.

Subscription Status for Adani Wilmar’s Initial Public Offering

According to market statistics, the Adani Wilmar IPO received bids for 212.9 crore shares vs the 12.3 crore shares on offer, resulting in a 17.4 times subscription. Qualified institutional buyers (QIBs) and non-institutional investors (NIIs) were each oversubscribed by 5.7 and 56.3 times, respectively. The retail investor quota was filled 3.9 times over.

Company details

Adani Wilmar Ltd (AWL) is an FMCG food business that was founded in 1999 as a joint venture between the Wilmar Group and Adani Group. It offers most of the important kitchen commodities for Indian customers. The company’s product range is divided into three categories: packaged food, edible oil, and industrial basics.

GMP for Adani Wilmar’s Initial Public Offering

According to market experts, the business had a grey market premium (GMP) of Rs 30 before the BSE and NSE listing, compared to Rs 50 during the IPO. It suggests that the grey market expects this public issue to list for roughly Rs 260 (Rs 230 + Rs 30), up 15% from the price range of Rs 218 to Rs 230. Unlisted securities are traded on the grey market, which is an unofficial market. However, secondary market specialists claim that GMP isn’t a good predictor of a company’s predicted listing price since it has nothing to do with the company’s financial sheet.

Adani Wilmar Limited’s fundamentals, according to stock market analysts, are fairly robust, and its brands are widely distributed at FMCG retail shops. They projected a reasonable initial public offering of Adani Wilmar shares, with a listing premium of up to 15%. They predicted that Adani Wilmar’s stock will open at a price range of Rs 250 to Rs 260 per equity share.

Competitive advantages

• To grab a substantial portion of India’s kitchen spending, the company has a distinct and broad product range with market-leading brands.

• India’s leading consumer goods corporation, having a stronghold in the branded edible oil and packaged food industries.

• Industry-leading position in essentials

• Able to source high-quality raw materials

• A company with a well-established integrated business model, a well-established operational infrastructure, and excellent manufacturing capabilities.

• Professional management and an experienced board of directors, as well as a strong parentage.

Strengths of Adani Wilmar

Here are some of the beneficial aspects of this business.

• The firm is a large FMCG food company that provides Indian customers with most of the necessary kitchen commodities.

• It offers a well-balanced portfolio that caters to the majority of everyday needs. It is a member of the Adani and Wilmar groups and has a pan-India network.

• In the previous two years, the company has seen significant sales growth.

• The company’s margins improved from Rs 460.8 crores in FY20 to Rs 727.6 crores in FY21, indicating good growth.

• The full IPO proceeds would be used to expand and develop the firm.

Risks of Investing in Adani Wilmar

• Its company may have been harmed by unfavorable local and worldwide weather patterns.

• The company does not have long-term agreements with its raw material suppliers. Any rise in the cost of such raw materials might have a negative impact on the company’s operations.

• In addition to local suppliers, the company is heavily reliant on raw material imports. Any shortage of supplies or pricing increases might have a negative impact on the company.

• The edible oil industry accounts for a large amount of the company’s income, thus any decrease in demand might have an impact.

• Because firm items are commodities, their prices are prone to volatility and may have an impact on corporate profitability.

Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on investment or recommend buying and selling any stock.