Adani Wilmar doubles investor’s money in just 2 months; how it outperformed Paytm, Zomato

In recent times, when many high profile initial public offerings (IPOs) such as Paytm and Zomato received cold shoulder responses from investors, Adani Wilmar has managed to buck the trend with solid growth in its share price since listing on February 8, 2022. The stock price of edible oil maker breached ₹500-mark to hit a new all-time high of ₹514.95 per share on the BSE on Wednesday. The market capitalisation (m-cap) of the company also topped the ₹65,000 crore levels in the process.

Since listing, Adani Wilmar has delivered 123% returns to its shareholders, compared with the upper band of its issue price of ₹230 per share. In contrast, Paytm — India’s largest IPO till date — dropped 75% below the issue price of ₹2,150. Food delivery platform Zomato’s share price stood at ₹81, just ₹5 more than its IPO issue price of ₹76.

Adani Wilmar, a 50:50 joint venture between billionaire Gautam Adani-led Adani group and Singapore’s Wilmar group, has benefitted from its parentage, rise in palm oil prices, and recent buzz on the edible oil segment in the backdrop of Ruchi Soya’s ₹4,300 crore follow-on public offer (FPO). The stock price of the company has been affected by the Russia-Ukraine crisis as these countries are the major supplier of sunflower oil, one of the world’s leading edible oils.

Adani Wilmar is the seventh Adani Group company which is listed on the domestic exchanges. With a current market cap of ₹65,867.7 crore, it is the six largest group company. Adani Green Energy has the highest market cap (₹3,16,728 crore) within the group, followed by Adani Transmission (₹2,82,651 crore), Adani Total Gas (₹2,44,201 crore), Adani Enterprises (₹2,20,775 crore), Adani Ports and Special Economic Zone (₹1,62,842 crore), and Adani Power (₹68,325 crore).

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.

Adani Wilmar’s ₹3,600 crore IPO also got strong response from investors as the issue was subscribed 17.37 times. The three-day public offer, which opened between January 27-31, got an overwhelming response from non-institutional investors as the quote set aside for them was subscribed 56.30 times. The portion for retail investors and qualified institutional buyers was subscribed 3.92 times and 5.73 times, respectively, as per the data available on the NSE. The company intends to use the IPO proceeds to fund capital expenditure for the expansion of existing manufacturing facilities as well as developing new units. A part of the fund will be also used to repay debts, fund strategic acquisitions and investments, and meet general corporate requirements. On Wednesday, Adani Wilmar shares opened higher at ₹509.45 against the previous close price of 499.90 on the BSE. During the session, the stock gained as much as 3% to hit an intraday high of ₹514.95, while it touched an intraday low of ₹479.80.