Adani Wilmar crosses ₹1 lakh cr m-cap, edible oil prices fuel rally

Adani Wilmar has secured a place among the top-valued companies in the country as its market capitalisation crossed ₹1 lakh crore on Tuesday. The stock, which was listed on the bourses in February this year after a very successful IPO, has gained almost 250% over its issue price.

The Adani Wilmar shares hit the upper circuit of 5% today to reach the fresh 52-week high of ₹802.80. The large cap stock now has a market valuation of ₹1,04,338 crore, ranking it among the top-50 most valued firms in India.

The scrip had opened at ₹798 today after closing at ₹764.60 on Monday. The stock has been constantly gaining for the past four sessions, rising 20.15% during this period. Today, the Adani Wilmar share outperformed its segment by 3.5%.

The Adani Wilmar stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Adani Wilmar is the seventh subsidiary of the ports-to-energy conglomerate run by Gautam Adani to be listed on the Indian stock exchanges. Today, it also became the seventh Adani group company to cross ₹1 lakh crore in m-cap. Adani Green Energy (₹4,53,564.14 crore), Adani Transmission (₹2,96,811.25 crore), Adani Total Gas (₹2,78,625.89 crore), Adani Enterprises (₹2,60,468.02 crore), Adani Ports and Special Economic Zone (₹1,89,310.89 crore), and Adani Power (₹1,10,212.03 crore) have already part of this elite club. Adani Power had crossed the ₹1 lakh crore milestone last week.

Adani Wilmar was listed on the domestic bourses on February 8 after raising ₹3,600 crore through its IPO. The issue price for the IPO was ₹230 per share. Up 249% compared to the issue price, the share had doubled investors’ money within a month of listing.

The rally in Adani Wilmar share price has been primarily fuelled by the rise in edible oil prices following the Russian invasion of Ukraine. The commodity price has increased following the geopolitical crisis as Ukraine is one of the largest exporters of oilseeds like sunflower and soybean. The ban on export of Indonesian palm oil and Malaysian export tax are expected to further stymie the edible oil supply and drive prices upwards.

This rise in edible oil prices is expected to result in windfall gains from unsold inventory revaluation and improved margins for Indian producers like Adani Wilmar.

The FMCG company, which sells cooking oils under the Fortune brand, reported a 66% year-on-year growth in net profit to ₹211 crore in the third quarter ended December 2021, while revenue from operations surged 40% YoY to ₹14,379 crore. The company generated 84% of its total revenue from the edible oil segment, which stood at ₹12,118 crore in Q3 FY22, versus ₹8,647 crore in the year-ago period.