Adani Wilmar IPO, the joint venture between Adani and Wilmar group is launching its Initial Public Offering in India. If you have heard the name fortune, this is a product of Adani Wilmar. I will try to explain the business model, strengths, weaknesses, promoters, and financials.
A little Chronicle of Adani Wilmar.
The company was incorporated in 1999. It was started as a joint venture by Adani and Wilmar. Soon the company will list in the Indian stock market through an Initial Public Offering. Adani Wilmar will be the 7th company under the Adani group to list in the Indian Stock Market.
Products by the brand.
The FMCG company offers mostly kitchen commodities like fortune oil and other edible oil, rice, pulses, wheat flour, and sugar. “Fortune” is the largest selling edible oil in India and also the company’s flagship brand.
Adani Wilmar also provides Packaged food and FMCG, recently the brand started producing VA (Value Added) products such as rice bran health oil, fortified foods, ready-to-cook soya chunks, and khichdi, etc.
As of March 31, 2020, Adani Wilmar was India’s largest crude oil importer.
The company also offers industry essentials. For example, oleochemicals, castor oil, and its derivatives, and de-oiled cakes, etc.
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Let’s look into the promoters
| Promoter Entities | Parent Company | Ownership |
| Adani Comm Ltd. | Adani Enterprise | 50% |
| Lence Pte Ltd | Wilmar International | 50% |
Financials
According to its management, the company plans to go public and it is expected to bring Rs 4,500 off the market by IPO. The company sees PAT which is Profit After Tax, growing 58% annually in 2021. This year the PAT is 727.65 in 2021, from 460.87 in 2020. Revenue is also up 25% year-on-year.
| Financials | Mar-21 | Mar-20 | Mar-19 |
| Total Asset | 133,266.40 | 117,859.17 | 116,028.71 |
| Total Revenue | 371,956.58 | 297,669.86 | 289,196.81 |
| PAT | 7,276.49 | 4,608.72 | 3755.21 |
Capital Expenditure and Debt
The company’s long-term and short-term debt have increased from 2018-19 to 2019-20. But the Short term debt has increased this year and the Gross debt came down marginally in FY20-21.
| Debt | Long term | Short term | Gross |
| 2018-19 | 1050 | 780 | 1830 |
| 2019-20 | 1290 | 1010 | 2300 |
| 2020-21 | 1300 | 610 | 1910 |
On the other hand, the company reduces investment or Capital Expenditure (CAPEX). Investment in FY 2021 is 460 crore, less than 910 crores two years ago.
| Year | CAPEX |
| 2018-19 | 910 |
| 2019-20 | 630 |
| 2020-21 | 460 |
Significant Facts about Adani Wilmar
The company’s distributors are located in 28 states and 8 union territories across India, serving more than 1.6 million stores. As of now, the company operates 22 plants in 10 Indian states. Including 10 crushers and 18 refineries.
The company’s Mundra refinery is one of the largest single refineries in India, with a capacity of 5,000 M.tonnes per day. In addition to the 22 factories, Adani Wilmar will also use 28 leased units for additional production capacity as of March 31, 2021.
Adani Wilmar’s presence in the global market in the packaged food industry and essentials are some of the lesser-known aspects. In the period 2020-2021, the brand generated 2,700 crores from global markets.
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Strengths
- Adani Wilmar’s top 6 strengths are:
- Adani Wilmar is one of the largest manufacturers of oleochemical products in India.
- The company has a good opportunity to supply raw materials from leading global suppliers.
- Diverse product portfolio with leading brands for most everyday kitchen items.
- A strong sales infrastructure with a pan-India sales network.
- Market leader in edible oil and branded packaged food business in India.
- Experienced board members and management.
Weaknesses-
Despite the fact that the brand has been able to keep a good position in edible oil if you think about the industry specifically FMCG, there are some big-name that is the direct competitors of Adani Wilmar, Hindustan Unilever Limited (HUL), ITC Limited, Nestlé India, Britannia Industries and so on. These are some of the major players that AWL (Adani Wilmar Ltd) has to beat day by day if the brand wants to win.
AWL’s EBITDA margin fell to 3.8 percent in FY2021 from 4.8 percent. And lags most of the other FMCG majors. There is some buzz around the market talking about the decreasing CAPEX, that the company has to clear the air.
Conclusion-
Still, we have to wait for further updates and complete IPO details like IPO opening and closing price, Price per share, Lot size, etc. You will get these details in Moneycontrol.