NEW DELHI: Despite a not-so-encouraging performance of newly listed IPOs on the domestic bourses, most brokerages have given a ‘subscribe’ rating to the Adani Wilmar IPO.
Incorporated in 1999 as a joint venture between Adani Group and Wilmar Group of Singapore, Adani Wilmar (AWL) is an FMCG player who is floating its Rs 3,600 crore initial public offering (IPO) on January 27.
The IPO will close on January 31. On January 26, the share of the company was commanding the grey market premium (GMP) of 25%.
“In terms of valuations, the post-issue TTM (trailing 12 months) P/E (price-earning ratio) works out to 37.6x (at the upper end of the issue price band), which is reasonable considering AWL’s historical top-line & bottom-line CAGR of 13% and 39% respectively over FY19-21. Further,
Adani Wilmar has a strong brand recall, wide distribution, a better financial track record, and healthy ROE. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue,” analysts at Angel One said in a note.
The AWL shares will be offered at Rs 218-230 apiece. Investors can bid for a minimum 65 shares and in multiples of 65 thereafter. The company, known mainly for the Fortune brand of edible oil, has already mobilised Rs 939.9 crore from 15 anchor investors.
Coming to the company’s financials, its profit grew from Rs 376 crore in FY19 to Rs 728 in FY21 while net sales grew from Rs 28,797 crore in FY19 to Rs 37,090 crore in FY21. Similarly, Analysts at Choice Broking and Ventura also gave it a ‘subscribe’ rating.
“Over FY21-24, we expect Adani Wilmar to grow revenues at a robust CAGR (compound annual growth rate) of 16.7% to Rs 58,959 crore spearheaded by the FMCG vertical which is set to grow at a CAGR 31.5% to reach Rs 4,338 crore,” said Ventura Securities in a note.
It added, “We initiate with a ‘subscribe for the long term’ with a 24-month price target of Rs 468.8 per share (48.6x FY24 earnings) representing an upside potential of 103.8% from the upper price band,” the report said.
FabIndia to gift 7 lakh plus shares
Lifestyle brand FabIndia, which has been eyeing to raise Rs 4,000 crore through an initial public offer, has plans to gift more than 700,000 shares to artisans and farmers.
The company in its draft paper said that in order to “reward and express gratitude to certain artisans and farmers engaged with the company or its subsidiaries”,
FabIndia’s two promoters — Bimla Nanda Bissell and Madhukar Khera — intend to transfer 400,000 shares and 375,080 shares, respectively, to them. Azim Premji’s firm PremjiInvest runs more than 300 outlets in India and a couple of dozens overseas.