Adani Wilmar IPO Opens Amid Subdued Market Sentiments: Should You Subscribe?

The 7th Adani Group company has hit the primary markets today and here's what brokerages and analysts suggest on the issue. For all key details on the issue please check upon this link.

As per the latest data from the NSE as at 2:04 pm, the issue has received bids for 2,06,26,125 shares as against 12,25,46,150 shares offered or reserved equating to subscription of 0.17 times. Notably this issue entails a complete fresh equity issuance.

Before going ahead with the brokerages' take on the issue, let's understand

How the shares of Adani Wilmar are performing in the unlisted market space or the grey market that it is commanding?

As per IPOcentral.in, the portal that tracks IPOs, Adani Wilmar last commanded a GMP of Rs. 50 i.e. a 20 percent higher price over the issue's higher price band range. The GMP of the issue was quoting at Rs. 100 earlier. As per dealers tracking the issue, the recent or current broader market rout as well as the huge selling pressure that new age companies witnessed is weighing on the GMP of Adani Wilmar.

Brokerages and analysts take on Adani Wilmar IPO

Angel One
Rating: Subscribe

"In terms of valuations, the post-issue TTM P/E (Trailing Twelve Months PE) works out to 37.6x (at the upper end of the issue price), which is reasonable considering AWL's historical top-line & bottom-line CAGR of around 13 per cent and 39 per cent, respectively. Thus, the brokerage recommends a 'SUBSCRIBE' rating on the issue."

Marwadi Shares and Finance: Subscribe rating

"The company is a leading consumer product company in India with leadership in branded edible oil and packaged food business," said the brokerage with a subscribe rating. "It is available at a reasonable valuation as compared to its peers." The company added that Adani Wilmar shall list at a P/E of f 37.56 times with a market cap of Rs 29,898.6 crore whereas its peers, namely Nestle and Britannia Industries, are trading at PEs of 81.6x and 54.7x, respectively.

Choice Broking
Rating: Subscribe

At the higher end of the price band of Rs 230, AWL is demanding a P/E multiple of 37.5x, which is a discount to peer average of 57.6x. Its edible oil business is likely to have a secular growth market, but there is a huge untapped market for its Food & FMCG business segment, said the brokerage update. Hence, it recommends a 'SUBSCRIBE' rating on the isuse.

So, overall the outlook for the IPO is bullish citing various factors such as strong product portfolio, reasonable valuation, future growth plans, strong lineage and financials.

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