There is again seen a wave in the primary market after a hiatus due to the heightened volatility amid the global crisis. While this led even the biggest IPO LIC to defer its public issue plan, this Adani group 7th debutant- Adani Wilmar made rocking multibagger returns at a time when the markets in a similar timeframe have notched just marginal gains.
So, if you could not infer we are talking here about Adani Wilmar IPO that since its listing in February of this year has clocked gains to the tune of 152%.
Adani Wilmar IPO and current stock price details
The company's issue was listed on February 8 and its listing price has been Rs. 221 as against the issue price of Rs. 230. Now as on April 5, 2022 closing price the stock on the NSE is priced at Rs. 579.95 and this is a huge change of 152% over the issue price and 162% over the listed price.
Why the sharp run up in Adani Wilmar stock price?
The stock in the previous day's trade is locked in 5% upper circuit and hit its new high even as the markets softened in trade with Nifty cracking by close to 100 points.The stock's run up is to an extent fuelled by the commodity price increases amid the war situation between Russia and Ukraine. The company has a foothold in the edible oil market space and hence its shortage due to the war is also seen as a risk to the stock.
The company in its first announced quarterly results posted a net profit of Rs. 240.66 crore
About the company
The company with a market cap of Rs. 75,374 crore is a consumer food company. The company that is among the largest food companies in India offers essential kitchen commodities such as edible oil, wheat flour, rice, pulses and sugar. The company is a joint venture incorporated in January 1999 between the Adani Group, which is a multinational diversified business group with significant interests across transport and logistics, and energy and utility sectors, and the Wilmar Group, one of Asia's leading agribusiness groups which was ranked among the largest listed companies by market capitalization on the Singapore Exchange as of February 2021.
Should you buy Adani Wilmar shares?
Brokerage given the company's competitive advantage and its strength areas is cited as a good buy. In the view of Edelweiss, "All in all, we are enthused by the strong growth visibility. However, in our SoTP based valuation, higher margin volatility ushers us to value the company at a discount to the consumer staples companies in our coverage. The return ratio profile is decent, albeit lower than the sector average," the domestic brokerage and research firm Edelweiss added.
The brokerage expects the edible oil and packaged food industry to sustain its strong growth trajectory, given the increasing penetration of branded companies, growth of the enduser industries and the growing export market.