Adani Wilmar IPO

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(i) Adani Wilmar is one of the few large FMCG food companies in India to offer most of the essential kitchen commodities for Indian consumers, including edible oil, wheat flour, rice, pulses and sugar. (Source: Technopak Report) Essential commodities, such as edible oils, wheat flour, rice, pulses and sugar, account for approximately 66% of the spend on essential kitchen commodities in India. (Source: Technopak Report).

(ii) The products are offered under a diverse range of brands across a broad price spectrum and cater to different customer groups. It is a joint venture incorporated in 1999 between the Adani Group, which is a multinational diversified business group with significant interests across transport and logistics, and energy and utility sectors, and the Wilmar Group, one of Asia’s leading agribusiness groups which was ranked among the largest listed companies by market capitalization on the Singapore Exchange as of June 30, 2021.

(iii) A significant majority of the sales pertain to branded products accounting for approximately 73% of the edible oil and food and FMCG sales volume for the financial year 2021.

Fortune- A Flagship Product

Under Refined Oil in Consumer Packs (“ROCP”) market share of the branded edible oil was of 18.3%, putting Adani Wilmar as the dominant No. 1 edible oil brand in India (Source: Nielsen Retail Index – MAT March 2021). “Fortune”, is the largest selling edible oil brand in India. Adani Wilmar is one of the fastest growing packaged food companies in India, based on the growth in revenues during the last five years.

Focus on High Margin Products

In recent years, Adani Wilmar IPO have been placing an increasing focus on value-added products, with an aim to diversify its revenue streams and generate high profit margins. The value-added products launched in recent years include functional edible oil products, such as rice bran health oil, fortified foods, ready-to-cook soya chunks and khichdi, and FMCG.

How they Source Raw Material?

It is India’s largest importer of crude edible oil as of March 31, 2020 (Source: Technopak Report), which provided them with bargaining power to source better quality raw materials on favorable commercial terms. They also benefit from the support of the Wilmar Group for market intelligence and raw material sourcing, as well as its long-standing relationships with the international suppliers.

Manufacturing Units?

They have 22 plants which are strategically located across 10 states in India, comprising 10 crushing units and 18 refineries. Out of the 18 refineries, ten are port-based to facilitate use of imported crude edible oil and reduce transportation costs, while the remaining are typically located in the hinterland in proximity to raw material production bases to reduce storage costs. The refinery in Mundra is the one of the largest single location refineries in India with a designed capacity of 5,000 MT per day (Source: Technopak Report). In addition to the 22 plants they own, they also used 28 leased tolling units as of March 31, 2021, which provided them with additional manufacturing capacities. Hence, they have and intend to continue to have an asset-light business model.

Backward and Forward Integration?

(i) Most of the crushing units are fully integrated with refineries to refine crude oil they produce in-house. They further derive de-oiled cakes from crushing and use palm stearin derived from palm oil refining to manufacture oleochemical products, such as soap noodles, stearic acid and glycerin, and FMCG, such as soaps and handwash

(ii) integration of manufacturing capabilities of edible oils and packaged foods at the same locations. Such integrated manufacturing infrastructure has enabled Adani Wilmar to share supply chain, storage facilities, distribution network and experienced manpower among different products and reduce the overall costs for processing and logistics.

Distribution Network?

(i) They have the largest distribution network among all the branded edible oil companies in India (Source: Technopak Report).

(ii) As of March 31, 2021, they were present in one out of three households in India with a household reach of 90.51 million through its Fortune brand (Source: IMRB).

(iii) As of March 31, 2021, they had 5,566 distributors. The distributors are located in 28 states and eight union territories throughout India, catering to over 1.6 million retail outlets (Source: Technopak Report). These retail outlets represent approximately 35 % of the retail outlets in India (Source: Technopak Report).

(iv) As of March 31, 2021, they also had (i) 85 depots, with an aggregate storage space of approximately 1.6 million square feet across the country to ensure availability of the products; and (ii) 619 personnel in our sales and marketing team.

(v) They leverage edible oil distribution 129 network for packaged foods, and currently, have approximately 65% of the edible oil distributors catering to the packaged food distribution. In addition to traditional retail distribution channels, they also serve customers offline and online through Fortune Mart and Fortune Online and provide them with ease of ordering our products from home.



Objects of the Adani Wilmar IPO:

The Company proposes to utilise the Net Proceeds of Rs.4500 Crores towards funding of the following objects: 1. Funding capital expenditure for expansion of our existing manufacturing facilities and developing new manufacturing facilities (“Capital Expenditure”). 2. Repayment/prepayment of our borrowings. 3. Funding strategic acquisitions and investments. 4. General corporate purposes.

Adani Wilmar IPO Details:

Open Date: Jan 27 2022
Close Date: Jan 31 2022
Total Shares: 156521739
Face Value: ₹ 1 Per Equity Share
Issue Type: Book Built Issue
Issue Size: 3600 Cr.
Lot Size: 65 Shares
Issue Price: ₹ 218-230 Per Equity Share
Listing At: NSE,BSE
Listing Date: Feb 08 2022

Promoters And Management:

(i) Kuok Khoon Hong is the Non-Executive Chairman of the Company. He holds a bachelor’s degree in business administration from the University of Singapore. He has over 40 years of experience in the agribusiness industry. He is the co-founder of Wilmar International Limited and currently, he is the Chairman and Chief Executive Officer of Wilmar International Limited. He was appointed to our Board of Directors with effect from February 27, 1999. (ii) Angshu Mallick is the Chief Executive Officer and Managing Director of our Company. He holds a bachelor’s degree in dairy technology from Dairy Science College, National Dairy Research Institute, Karnal and a post graduate diploma in rural management from Institute of Rural Management, Anand. He has over 35 years of experience in marketing and sales in the food industry. Previously, he was working with Gujarat Co-operative Milk Marketing Federation Limited as Manager, 172 Marketing and Distribution and has been working with our Company since March 1999. He was appointed to our Board of Directors with effect from April 1, 2021.

Financials of Adani Wilmar IPO:

Particulars (in Cr.) Mar-21 Mar-20 Mar-19
Sales 37090 29657 28797
Cost of Material Consumed 32276 22326 21844
Gross Margin 12.98% 24.72% 24.14%
Change in Inventories -945 469 35
Purchase of Traded Goods 1158 2573 3185
Employee Benefit Expenses 321 223 206
Other Expenses 2953 2753 2394
Operating Profit 1327 1313 1133
OPM % 3.58% 4.43% 3.93%
Other Income 105 109 122
Interest 406 569 486
Depreciation 267 242 199
Profit before tax 756 609 567
Net Profit 726 460 375
NPM % 1.96% 1.55% 1.30%
No. of shares 114.20 114.20 114.20
EPS in Rs 6.36 4.03 3.28

Comparison With Peers:

Godrej Consumer and ITC may be the nearest peers which are currently trading at a P/E of around 71 and 18.91. And, Adani Wilmar is coming up with a P/E of 37x. So, it looks fairly priced.

Recommendation on Adani Wilmar IPO:

Review and Recommendation of  Adani Wilmar by InvestorZone is 3/10 1. Company’s portfolio of products spans across 3 categories: (i) edible oil, (ii) packaged food and FMCG, and (iii) industry essentials. They have presence across a wide array of sub-categories within each of these 3 categories. 2. Majority of their sales pertain to branded products accounting for approximately 73% of their edible oil and food and FMCG sales volume for the financial year 2021. 3. They have strong raw material sourcing capabilities are supported by their market standing and extensive business networks. They were India’s largest importer of crude edible oil as of March 31, 2021. 4. Business has shown good growth in the last 3 years. However, OPM Margins of 3.85% , NPM margins of 1.96%, and ROCE of just 12.75% are not good parameters as far as investment is concerned. ROCE of just 12.75% is very poor for Adani Wilmar. If you see peers like HUL, ITC, & Dabur have ROCE of 117%, 32% and 27%, which make them great companies to invest.

Registrar of Adani Wilmar IPO:

  1. Link Intime India Private Limited

Discussion on Adani Wilmar IPO:


    Shares Outstanding before IPO = 1,142,948,860
    Fresh Shares to be issued in IPO = 156521739.1
    Total Shares After IPO = 1,142,948,860
    IPO Price = 240
    Mcap = 31000 Cr
    EPS = 6.36
    P/E = 37x.

    As Per RHP, Below is the explanation regarding shareholder category (whoever holding shares in demat on 19th Jan -> whoever holding even 1 or more AEL share in his demat on 19th Jan ):

    1. If you are applying in shareholder category under 2 lakh amount, then you can apply one more application(from same demat/same PAN) either in retail category or in HNI category also.

    2. If you are applying for more than 2 lakh amount in shareholder category then you can apply one more application in retail category also (from same demat/same PAN) but you cannot apply in HNI category.

    3. Allotment in shareholder category will be done in proportionate basis like HNI category so allotment is not guaranteed with 1 lot of shareholder application.

    4. Shareholder category will be identified using PAN number, so you can use different Demat account also to apply in shareholder category (still better apply from same demat account where AEL shares were hold on 19th Jan).

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