Adani Wilmar IPO: Company looking at Rs 30,000 cr valuation on listing

Adani Wilmar IPO: Company looking at Rs 30,000 cr valuation on listing

At Rs 230 per share, AWL’s valuation at IPO will be lower than its yearly sales - making it an attractively priced stock at the bourses.

Adani Wilmar IPO: Company looking at Rs 30,000 cr valuation on listing Adani Wilmar IPO: Company looking at Rs 30,000 cr valuation on listing

Adani Wilmar Ltd. (AWL) -- the lesser-known consumer goods venture from billionaire Gautam Adani’s stable -- is all set to get listed on the bourses at a moderate valuation. The company that raked in Rs 37,000 crore in sales last fiscal, is planning to offer 12 per cent of its ownership to the public at a valuation of Rs 30,000 crore.

“After the IPO (initial public offering), 12 per cent of the ownership will be with the public, while the rest will be held equally by the two promoters of the company”, AWL’s chief financial officer, Shrikant Kanhere told Business Today.

(Credit: Mohsin Shaikh)

Out of the 88 per cent shares that will remain with the promoter group, Adani Commodities Ltd and Lence Pte. will own 44 per cent of AWL each, post-IPO. Currently, the two entities -- representing the Adani Group and Wilmar Group, respectively -- hold 50 per cent each of AWL.

According to the company management, the IPO due on January 27, is expected to raise Rs 3,600 crore. While Rs 1,900 crore will be utilised in capital expenditures, Rs 1,059 crore will be used in paring its debts and Rs 450 crore would be allocated towards “funding strategic acquisitions and investments".

(Credit: Mohsin Shaikh)

On listing, the Ahmedabad-based FMCG major will become the largest consumer goods company in India by revenue. In FY20-21, AWL’s revenue stood at Rs 37,196 crore -- 25 per cent higher than Rs 29,767 crore it had posted a year ago. As per its Red Herring Prospectus, the company posted Rs 24,957 crore revenue during the first six months of FY21-22 (April-September period) or 53 per cent higher over the same period last year.

Its net profit jumped 23.5 per cent during the period to Rs 357 crore from Rs 289 crore. While its earnings per share grew to Rs 3.12 from Rs 2.53.

(Credit: Mohsin Shaikh)

According to Angshu Malik, chief executive officer and managing director of AWL, given the nature of the edible oil business that the company is heavily invested in, its margins are at par with industry standards. 

“In edible oil business, it is the faster rate of rolling the capital employed that makes the difference. It is an inherently low margin business but the scale of operations that we have is what keeps our return on capital employed high”, Malik told Business Today in an exclusive interaction.

To lift its margins, the company is now looking to expand into value-added categories like ready to cook, personal care items and speciality segments in the edible oil business, he said.

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