Adani Wilmar soars 8 per cent post tepid debut

At 10:05 am, Adani Wilmar traded at Rs 244, a 6 per cent premium when compared to its issue price of Rs 230 per share.

Adani Wilmar debuted on the NSE with a minor loss at Rs 227, down 1.3 per cent when compared with its issue price of Rs 230 per share. The stock, however, soon bounced back and rallied to a high of Rs 249 - a 8 per cent premium to its issue price in early trades.

At 10:05 am; Adani Wilmar traded at Rs 244, 6 per cent higher against its issue price on the NSE and BSE. A combined around 45 million equity shares changed hands on the both the exchanges. In comparison, the S&P BSE Sensex and Nifty50 indices were down 0.05 per cent each.

The Rs 3,600 crore initial public offer (IPO) of Adani Wilmar had received a decent response with the issue subscribed 17.37 times. The qualified institutional buyer (QIB) portion of the IPO was subscribed 5.73 times, high networth individual (HNI) 56 times and retail nearly 4 times. The shareholder category saw 33 times subscription, while employee quota remained undersubscribed at 51 per cent.

Adani Wilmar is the seventh listed company of the Adani Group. The company is  a joint venture between the Adani group and Wilmar group, and is India’s leading manufacturer of edible oil under the Fortune brand. Besides oil, the company offers products like wheat flour, rice, pulses, sugar and packaged food.

The proceeds of the public issue will be used to fund capital expenditure, reduce debt and for acquisitions as the company seeks to become India's biggest food and FMCG company.

Most of the brokerages had ‘subscribe’ rating on Adani Wilmar. K R Choksey believes Adani Wilmar’s focus on growth of FMCG and packaged food business and shift to value added products will result in increasing market share and expansion of margins. With the Indian economy recovering strongly from the Covid-19 impact and expected to grow faster to become a $5 trillion economy, places Adani Wilmar in a sweet spot to grow multifold, the brokerage firm said in IPO note.

Adani Wilmar benefits from its parentage, leveraging the in-depth understanding of local markets, extensive experience in domestic trading and advanced logistics network.  The company has successfully managed to develop its “Fortune” brand in the edible oil category with leadership position in the last 20 years. The company is one of the few major FMCG players to enjoy pan-India coverage with its huge distribution network comprising 5,566 distributors across 28 states and eight union territories throughout India catering to over 1.6 million retail outlets, ICICI Securities said in a note with ‘unrated’ rating on the company.