Adani Wilmar was incorporated as a JV between Adani Group and the Wilmar Group in 1999. It is an FMCG organization offering the vast majority of the necessary kitchen-used commodities. The company’s main product line includes consumables such as Edible Oil, Sugar, Wheat flour, Pulses, Ready cook Soya Chunks, Packaged food, and Rice. The organization is also engaged in manufacturing industrial chemicals such as oleochemicals, castor oil, and its subsidiaries. Adani Wilmar is the owner of the “Fortune,” which is the biggest selling Edible Oil brand in India. Adani Wilmar IPO also has a very vast supply chain, logistics, and distribution network. It is one of the largest companies in the sector with huge raw material sourcing and the largest manufacturer of Edible Crude Oil.
The company has a manufacturing facility of 22 plants in 10 states of the country. It also operates 10 squashing units and 18 refining facilities. The Mundra manufacturing plant of the company is one of the biggest refineries with a capacity of 5,000 MT of Edible Oil each day. Through its distribution network, the company has set up a PAN India presence with sales in 28 states and 8 Union Territories, accounting for 1.6 million retail outlets.
OBJECTS OF THE ADANI WILMAR IPO ISSUE:
- Prepayment of all the loans of the company, which be availed on a consolidated basis.
- To meet corporate targets.
- To fund the working capital requirement.
- The company also has an objective to fund their CAPEX Plan to expand their existing manufacturing units and develop new facilities of refinery and manufacturing.
- The company also intends to fund various investments and strategic acquisitions.
BASIS OF THE OFFER:
- The company has a separated and diversified product portfolio, which incorporates market-driving brands. It ensures that the company enjoys a market leader position in India’s kitchen spending.
- One of India’s most notable companies engaged in consumer products with a fortress in the consumable oil and packaged food ventures.
- In the field of industry essentials, the company stands a firm dominating position.
- The company has a great sourcing ability for raw and unrefined materials.
- The company follows an incorporated business practice with a grounded functional framework and an excellent manufacturing facility.
- The company owns a huge supply chain and distribution network that covers the whole of India.
- Sustainability in the natural and social domains is featured in the working profile of the company.
- The company has a proficient administration and a prepared, excellent governing body backed by a solid promoter base.
ADANI WILMAR IPO:
Adani Wilmar, a company of Adani Group with a JV with Wilmar Group, has its headquarters in Ahmedabad. The company submitted its DRHP to the SEBI and is currently waiting for approval from SEBI to float its IPO in the market. The company has brought forward the IPO is purely an issue of fresh equity worth Rs. 3600 crores. Check Day by Day IPO Subscription Details (Live Status)
| IPO Opening Date | January 27, 2022 |
| IPO Closing Date | January 31, 2022 |
| Issue Type | Book Building Type |
| Face Value | Rs.1/ Equity Share |
| IPO Price | Rs.218 – Rs.230 |
| Market Lot | 1 lot of 65 shares |
| Minimum Order Quantity | 65 shares |
| Minimum Order Price | Rs.14,950 |
| Maximum Order Quantity | 13 lots corresponding to 845 shares |
| Maximum Order Price | Rs.194,350 |
| Listing At | BSE, NSE |
| Issue Size | Rs.3600 Crore |
| Fresh Issue | Rs.3600 Crore |
| Offer for Sale | 0 |
| Basis of Allotment Type | % Of the Offer been allotted by IPO |
| Qualified Institutional Buyer | 50 |
| Non-Institutional Investor | 15 |
| Retail | 35 |
| Basis of Allotment Date | February 3, 2022 |
| Initiation of Refunds | February 4, 2022 |
| The Credit of Shares to Demat Account | February 7, 2022 |
| IPO Listing Date | February 8, 2022 |
FINANCIAL TRENDS OF ADANI IPO:
| Particulars | For the year with amount in Crores | ||||
| 31-Mar-21 | 31-Mar-20 | 31-Mar-19 | |||
| Total Assets | 13,326.64 | 11,785.92 | 11,602.87 | ||
| Total Revenue | 37,195.66 | 29,766.99 | 28,919.68 | ||
| Profit After Tax | 727.65 | 460.87 | 375.52 |
| PARAMETER | MARCH 21 | MARCH 20 | YoY % |
| Core EBITDA Margin (%) | 3.57 | 4.42 | -19.08 |
| EBIT Margin (%) | 3.14 | 3.97 | -21.06 |
| Pre-Tax Margin (%) | 2.04 | 2.05 | -0.66 |
| PAT Margin (%) | 1.76 | 1.36 | 29.50 |
| Cash Profit Margin (%) | 2.48 | 2.17 | 14.18 |
| ROA (%) | 5.20 | 3.46 | 50.15 |
| ROE (%) | 22.25 | 17.16 | 29.66 |
| ROCE (%) | 23.10 | 26.69 | -13.47 |
| Asset Turnover(x) | 2.95 | 2.55 | 15.94 |
| Sales/Fixed Asset(x) | 7.95 | 7.36 | 8.10 |
| Working Capital/Sales(x) | 103.41 | 3588.27 | -97.12 |
| Fixed Capital/Sales(x) | 0.13 | 0.14 | -7.49 |
| Receivable days | 11.99 | 13.41 | -10.61 |
| Inventory Days | 42.34 | 48.45 | -12.62 |
| Payable days | 11.43 | 52.51 | -78.23 |
| Sales Growth (%) | 25.06 | 2.98 | 739.71 |
| Core EBITDA Growth (%) | 0.78 | 16.09 | -95.15 |
| EBIT Growth (%) | -1.27 | 13.20 | -109.62 |
| PAT Growth (%) | 61.96 | 10.26 | 504.19 |
| EPS Growth (%) | 57.89 | 19.11 | 202.90 |
| Total Debt/Equity(x) | 0.58 | 0.89 | -35.48 |
| Current Ratio(x) | 1.04 | 1.00 | 4.19 |
| Quick Ratio(x) | 0.47 | 0.48 | -2.01 |
| Interest Cover(x) | 2.86 | 2.07 | 38.21 |
WEAKNESS AND THREATS:
Let’s have a look at weakness and threats of Adani Wilmar IPO.
- The company is highly vulnerable to weather patterns, and any upset with monsoon or any weather can hinder the raw material for the production of the company’s finished product.
- The company is expanding its business operation with a product portfolio. The company needs to execute its growth and expansion plan carefully for further developments.
- The company is also vulnerable to price, volatility, and many other uncontrollable factors of the commodity. It can have a significant impact on the financial performance of the company.
- The company recently concluded a large CAPEX plan which led to a high debt with a very moderate capital structure.
- The company is engaged in a very high working capital requirement business which keeps a lower ROCE.
- The company also faces challenges with Forex Fluctuation rates.
- The company has an over-dependence on Edible Oil as a primary source of the company’s revenue. Any hindrance with this commodity, drop in demand, inefficiency in the supply chain can lead to a huge challenge.
- The company on the front of export faces import duty as well as import restrictions from other countries. It stops the growth of the company on an International Level.
- The COVID-19 pandemic has hit the company badly in terms of financial, operational, under-utilization of resources at disposal, manufacturing, supply chain, logistics, and network system.
- The COVID-19 has also changed the consumer spending pattern with consumer goods, which is a challenge for Adani Wilmar.
- The company is vulnerable to the availability, supply chain, and pricing of the raw material.
- The company, along with its subsidiaries, the parentage of the company, and the board of directors are currently under trial for legal procedure.
- The company operates in a Highly Competitive Market. It creates pressure on customer retention with the company.
- The company also faces challenges of quality of their commodity products and fraudulent activities of fake products being sold under their brand. It can lead to a negative image of the brands of the company.
STRENGTHS AND GROWTH ASPECTS:
Let’s have a look at strengths and growth aspects of Adani Wilmar IPO.
- The company has a strong presence with a huge market share in the domestic and international markets.
- The company has a solid brand value of its commodities with a huge customer base and reach.
- Adani Wilmar is one of the largest and most rapidly growing FMCG companies in the country. The company has a very diversified product portfolio along with the focus of the company to expand their product portfolio along with the expansion of the manufacturing and Refining facilities of the company.
- The company is the market leader in the edible crude oil and lauric fat category. It is also the largest manufacturer and also the largest exporter of castor oil commodities.
- The company is engaged in a business where it has a quick cash conversion with the sale of its product, which enables the company to operate on a smooth cash flow.
- Through its wide supply chain, logistics, distribution, and network system, the company has established a PAN India presence in the country.
- The company has a strong & robust financial and operational strategy. It enables the company with a lot of potential upsides with long-term organic growth.
- The company will also benefit from the increase in awareness regarding the use of Edible Oils. It will help the company with improvement in the operating margins.
- The company has a very Comprehensive B2C consumer and packaged products portfolio. It accounts for the essentials and necessities of the kitchen.
- The company gains a lot from its strong parentage, a Joint Venture of Adani group and Wilmar Group. The Adani group helps them with insights into the local market along with the manufacturing and refining setup. The Wilmar Group helps the company with process execution, real-time market information, technical expertise, global linkages, and sourcing skills.
- The company has registered a consistent growth in its operations in the last five financial years. The growth is driven by the sale, volume, profitability of the edible oil and other kitchen necessities.
- The company also registered an improvement in its capital structure. It was marked by the ratio of total liabilities to the company’s tangible net worth is improving.
- Adani Wilmar is also the biggest beneficiary of its strategic manufacturing, refining, supply chain, storage, and distribution facility.
- The company estimates growth in terms of operation and revenue with a CAGR of 16% until FY25.
- The company has a Well-defined risk and governance structure.
PROMOTERS:
- Adani Enterprises Limited
- Adani Commodities LLP
- Lence pte Limited
| Pre-Issue Share Holding | 74.92% |
| Post Issue Share Holding |
CONTACT DETAILS:
Adani Wilmar Limited
Fortune House, Near Navrangpura Railway Crossing,
Ahmedabad 380009, Gujarat, India
Telephone: +91-79-26455848
E-mail: investor.relations@adaniwilmar.in
Website: www.adaniwilmar.com
REGISTRAR:
Link Intime India Private Limited
C 101, 247 Park
L.B.S. Marg
Vikhroli (West)
Mumbai 400 083
Maharashtra, India
Telephone: +91 22 4918 6200
E-mail: adaniwilmar.ipo@linkintime.co.in
Website: www.linkintime.co.in
LEAD MANAGER(S):
- Kotak Mahindra Capital Company Limited
- J.P. Morgan India Private Limited
- BofA Securities India Limited
- ICICI Securities Limited
- Credit Suisse Securities (India) Private Limited
- HDFC Bank
- BNP Paribas
