Adani Willmar IPO : Apply or not?🙄 | helppediaindia
The seventh company of the Adani Group - Adani Wimar, is going to get listed on the stock exchanges. You must have used their fortune brand at some point of time. It is a very interesting company. And applying for the IPO of the Adani group is a different fun game. We will divide this IPO review into three parts. Business, valuation and management. Namaskar! I am Prasad and I welcome you all in today's episode. About whom we will talk later in the video. Adani Wilmar is one of India's leading FMCG companies.
FMCG has a sub-segment called- Essential Kitchen Commodities. And Adani Wilmar operates in the same. They mainly have four products- Oil, Pulses, Wheat Flour and rice. The opportunity is very big. And the size of this total IPO is Rs 3600 Crore. Out of that, Rs 1900 Crore, that is more than 50% amount, is going to be used for the expansion of the company. If we look at the last three year's revenue and profit growth, we can see very good growth there. In the financial Year 2018, the company's revenue was close to Rs 26,000 crore. Which, by the financial year 2021, has come close to Rs 37000 Crore. Similarly, the profit of the company was Rs 374 Crore in the FY 2018. Which, by the financial year 2021, has come to Rs 654 Crore. Most of the companies who have come with an IPO in the last year, I have observed one interesting fact about them. That the year when they have launched their IPO, in their previous financial year, their financials have seen an abrupt rapid growth. And the same fact can be seen in this IPO as well. The number of investors applying for Indian IPO has gone up by 55%. There is one more investment in which the number of investors has increased by 76% And that is Crypto Currency. As the Crypto-adaption is growing in India, a lot of people are joining with this trend. And therefore the government is also trying to regulate it soon. So that the investors can safely invest in Cryptos. So if you want to invest in Cryptos, then Coinswitch Kuber is India's biggest and simplest Crypto Exchange. On this app, Crypto trading and investing for starters and existing investors, has been made very simple and easy. Here you can easily deposit and withdraw your money. You can start your Crypto journey with just Rs 100. With the smart and fast KYC supoort, Here you get the chance to invest in more than 85 Crypto Currencies. This platform has more than 1.5 Crore registered investors. which is very impressive in itself. With the Instant deposit and withdrawal feature, the simple UI of Coinswitch Kuber, will make your investing process as simple as ordering food online. So if you click on the link given in the description, You would get free bitcoins worth Rs 50. And if you refer this to your friends, you would get free bitcoins worth Rs 100. So click on the link given in the description below, Do check out the Coinswitch Kuber app. This company which started in 1999, let me tell you some interesting facts about it. Currently, in the Soyabean Oil segment, the company ranks number 1. In the mustard oil segment also it is number 1. And in the Palm Oil category, it is number 2. In the branded soyabean oil segment, it holds a 28% market share. In the branded mustard oil segment it has 10%. And in the palm oil segment, it has 11%. Likewise, in the overall branded edible oil market segment, the company has 18.3% of the market share. Which is the highest of all. After them, the next is Ruchi Soya who have 8% of market share. Next is Emami who have 6% of market share. And after that comes the Cargill who has 4% of market share. Slowly, the company is entering other segments also other than oil. Like Wheat Flour and Rice. In the branded wheat flour segment, the company ranks second in India. And on third rank in the rice segment. Seeing the company's financial's, one thing is pretty clear, that even today, company's dependency on edible oils is too much. The company's 82% of the revenue comes from edible oils. 13% comes from the Industry essentials. and 8% from the packaged foods. Another interesting fact here is, the debts are very low. If we talk about rest of the Adani Group, we see a lot of debt. And that is a very big risk factor for the Adani group. But here, the company's long term debt is Rs 1300 Crore. And if we compare it with the profits of the company, it's not much. Also, whatever money it is raising from the IPO, Rs 1100 Crore is directed towards debt repayment. And after that, the total debt is going to reduce further. And seeing something like this in the Adani group is a little rare. Let us now talk about the valuation of the company. But before that, let's talk about the company's shareholding pattern. The company is a 50-50 joint-venture Between the Adani Group and the Wilmar Group. After this IPO, 12% shareholding will go to the public. And the rest 88% will remain with the company's promoters, that is, it will be with the Adani group and the Wilmar group. The price band of this IPO is between Rs 218 to Rs 230. So at the upper price band, the company's market capitalisation, is coming around Rs 30,000 Crores. And after a long time, we can say that a company's IPO has come whose valuations are very interesting. In the previous financial year, the company's sales was Rs 37000 Crore. So the market cap of the company is even less than its one-year sales. If we compare it with the profits of the company, Then the company's price to earning ratio is coming around 36. So after the listing of the company it will become India's 3rd largest FMCG company. After the ITC and the Hindustan Unilever. As far as valuations are concerned, I don't think they are too much. Recently we saw that a lot of startups launched their IPOs. And the valuations of lot of these startups were very absurd. After that, now their prices have fallen below the listing price. But here I feel these are some sustainable valuations. Let's move ahead and talk about the company's management. A lot of questions were raised about the company's management last year. When about 6-7 foreign portfolio investors, invested in a slightly different manner in the company. There are around 3 foreign portfolio investors are there, who have invested Rs 45000 Crore in the Adani group. And the address of all the three companies is Less Cascade Building, Edit Cavalstreet, Port Louis Mauritius. An article from The Morning Context brought this out in the public, last year. And after that, a lot of questions were raised on these funds. And even today, the questions remain unanswered. Because even today, it is not known who owns these funds. And when a lot of Adani Group company's Share prices had grown too high, Even then, no one from these funds, sold the Adani group's shares. So, if we attempt to summarise this IPO, then here are some important points. The business segment in which the company is operating, is very lucrative. And its market size is also very big. And the company has big opportunities to tap them. Already in a lot of segments, the company holds the number 1 position. But as per the market share, they can grow even faster. Company's financial growth is looking good. And I feel, the valuations of the company are also good. But the questions on the company's management and FPI funds are still unanswered. As far as long term investment is concerned, you must do a deep analysis of essential kitchen commodities segment. And if we talk about the listing gain, there's a simple solution, Pay attention to how the IPO is being subscribed for the initial 2 days. If it is being subscribed for more than 5 to 6 times, in the initial two days, then you stand a very good chance to make money. If you look at the statistics, more than 90% of the companies, whose IPOs got subscribed by more than 5 to 6 times, in the initial two days, they have given very good listing gains. So, are you subscribing to the Adani Wilmar IPO or not? And why? Please let us know by commenting below.
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