Adani Wilmar Fixes IPO Price Band At Rs 218-230 Per Share , Plans To Raise Rs 3,600 Cr

Adani Wilmar, which is an equal joint venture between Ahmedabad-based Adani group and Singapore's Wilmar group, will hit the capital market during January 27-31 period with the offer

The public issue of Adani Wilmar, which markets its edible oils and some food products under Fortune brand, comprises fresh issue of equity shares and there will not be any secondary offering. Image: Getty

New Delhi: Adani Wilmar on Friday fixed a price band of Rs 218-230 a share for its Initial Public Offer (IPO) through which it aims to raise up to Rs 3,600 crore to fund capital expenditure, reduce debt and for acquisitions as it seeks to become India's biggest food and FMCG company.

Adani Wilmar, which is an equal joint venture between Ahmedabad-based Adani group and Singapore's Wilmar group, will hit the capital market during January 27-31 period with the offer.

The public issue of Adani Wilmar, which markets its edible oils and some food products under Fortune brand, comprises fresh issue of equity shares and there will not be any secondary offering.

Addressing a virtual press conference, Adani Wilmar CEO and Managing Director Angshu Mallick said the company will focus on increasing its market share in edible oils segment and grow food business. "We are one of the fastest growing food and FMCG companies," he said and expressed confidence of becoming biggest in this space in the coming years.

Mallick said the edible oils contribute 65 per cent of its business in volume terms and the remaining comes from food and industrial essentials segments. The company's food business is growing by around 25 per cent annually.

Adani Wilmar Chief Financial Officer (CFO) Shrikant Kanhere said the price band has been fixed at Rs 218-230 a share.

Investors can bid for a minimum of 65 equity shares and in multiples thereof. The bidding for anchor investors will open on January 25. Half of the issue size has been reserved for qualified institutional buyers, 35 per cent for the retail investors and the remaining 15 per cent for non-institutional investors.

Post-IPO, he said the public shareholding will be 12 per cent and the remaining 88 per cent will be equally held by the two promoters.

Asked about the reason for reducing the IPO size to Rs 3,600 crore from Rs 4,500 crore planned earlier, Kanhere said it has been made to make the public issue more optimistic and efficient in terms of capital structure.

As per the Red Herring Prospectus (RHP), the company proposes to utilise Rs 1,900 crore for capital expenditure, Rs 1,058.9 crore for repayment/prepayment of its borrowings and RS 450 crore for funding of strategic acquisitions and investments.

Mallick said the price of edible oils has seen its peak and has now come down significantly. Citing an example, he said sunflower oil prices have come down from Rs 180 per litre to Rs 135-140 per litre.

"Prices (of mustard oil) will further ease in the coming months in view of expected bumper crop of mustard," he added.

Currently, six Adani group companies are listed on the domestic bourses. Apart from Adani Enterprises, other listed ones are Adani Transmission, Adani Green Energy, Adani Power, Adani Total Gas, and Adani Ports and Special Economic Zone.

On the financial front, Adani Wilmar Ltd's revenue increased to Rs 24,957.28 crore for the six months ended September in the current fiscal year as against Rs 16,273.73 crore in the corresponding period of the previous year. During the same period, profit grew to Rs 357.13 crore from Rs 288.78 crore.

The company posted a revenue of Rs 37,195.65 crore and profit of Rs 728 crore in the entire 2020-21 fiscal.

Apart from cooking oils, Adani Wilmar sells food products like rice, wheat flour, and sugar. It also sells non-food products like soap, handwash, and sanitisers.

ICICI Securities, HDFC Bank, BNP Paribas, Kotak Mahindra Capital, JP Morgan, BofA Securities, and Credit Suisse are the book running lead managers to the issue.