Adani Wilmar, which sells cooking oils under the Fortune brand and various other food products, is going to raise Rs 3,600 crore through public issue which is only a fresh issue including reservation of shares worth Rs 107 crore for employees and Rs 360 crore for shareholders of the company. The company has already garnered Rs 940 crore through anchor book on January 25, ahead of public issue opening, at a price of Rs 230 per share.
On January 27, the first day of bidding, Adani Wilmar, a joint venture between Adani Group and Singapore-based Wilmar, received bids for 1.42 crore equity shares against an IPO size of 12.25 crore equity shares, with a subscription rate of 12 percent. After AGS Transact Technologies, this is the second IPO of 2022. The section reserved for individual investors received 26% of the total subscriptions, while the portion reserved for non-institutional investors received 8.15 lakh shares out of a total of 2.15 crore shares. The offer is still open for qualified institutional investors to submit bids.
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The funds will be utilised for its capital expenditure (Rs 1,900 crore), repaying of borrowings (Rs 1,058.9 crore), and the remaining Rs 450 crore for funding strategic acquisitions & investments. “It has had a significant growth and profitability record for the last three years. I would see this as good stock entering the FMCG sector. A price band of Rs 218-230 does not seem very expensive for the stock, given that its EPS was 64 last year,” says Sonam Srivastava, Founder of Wright Research.
Adani Wilmar recorded sharply higher revenue at Rs 24,874.52 crore for six months ended September 2021, increasing from Rs 16,188.58 crore in the corresponding period last fiscal. Profit jumped to Rs 357.13 crore from Rs 288.78 crore in the same period. In the financial year 2020-21, profit surged significantly to Rs 727.65 crore from Rs 460.87 crore in FY20, and revenue during the same period rose to Rs 37,090.4 crore from Rs 29,657.04 crore.
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