NEW DELHI: Adani Wilmar on Tuesday acquired Kohinoor rice, a move that will strengthen its position in the branded staples food business.
The acquisition would give Adani Wilmar (AWL) exclusive rights over the brand 'Kohinoor’ basmati rice along with ‘Ready to Cook’, ‘Ready to Eat’ curries and meals portfolio under the Kohinoor brand umbrella in India.
The edible oils major in a statement said that the addition of Kohinoor’s domestic Brand Portfolio strengthens Adani Wilmar’s leadership position in the food FMCG category by augmenting a strong product basket with a premium brand along with the potential to scale value added products.
“It also leverages the reach of Kohinoor brand to drive synergies for AWL across geographies and complements the reach of its flagship brand ‘Fortune’ in the food FMCG domain,” it said.
Even as FMCG companies are struggling with squeezed margins, Adani Wilmar is in a sweet spot among its peers because of its hold on the edible oil supply chain. The company, with its main focus on edible oil, is the largest edible oil manufacturer in India and in fact, 'Fortune' oil contributes close to 80% of Adani Wilmar’s revenues. Edible oil contributed nearly 84% towards its top-line for the year; At Rs 45,401 crore, sales of edible oils segment jumped 47.3% YoY from Rs 30,818 crore in FY2020-21.
The company on Monday reported a 46% increase in its revenues in its first results since the company’s debut on the stock exchanges earlier this year. Interestingly, the company had taken the top spot in the FMCG sector reporting Rs 54,214 crore revenue from operations. HUL, which was sitting on the spot for years, reported Rs 51,468 crore sales for FY2021-22.
Angshu Mallick, Chief Executive Officer and Managing Director of Adani Wilmar, said this acquisition is in sync with AWL’s business strategy to expand its portfolio in the higher margin branded staples and food products segment. “We believe the packaged food category is under-penetrated with significant headroom for growth,” Mallick said.
The Kohinoor brand portfolio comprises “Kohinoor” for premium Basmati rice, “Charminar” for affordable rice and “Trophy” for the HORECA segment.
Talking about stocks, shares of Adani Wilmar, which were regularly hitting the 5% upper circuit for the majority of last month, have been under pressure during the past couple of sessions. On Monday, it closed 3.41% lower at Rs 753.65 apiece on the BSE. Contrary to this, it had hit a fresh high of Rs 878 on April 28. Till date, the stock has corrected nearly 15% from its all-time high, which has brought down its market capitalisation below the Rs 1 lakh-crore mark.
Adani Wilmar, a 50:50 joint venture between Adani Group and Singapore-based Wilmar, which is also one of the largest palm oil producers in the world, hasn’t felt strong heat from the oil prices crisis. With ‘Fortune’ as its explicit champion, the Kohinoor acquisition makes the company’s goals to improve its positioning in the branded staples business clear and convincing.