Adani Wilmar IPO fully subscribed on day-2 of sale; GMP steady, should you subscribe or not

Shares of Adani Wilmar continue to trade at a premium of around Rs 40-50 per share in the grey market, over the IPO price band of Rs 218-230 apiece.

Retail investors have oversubscribed their portion of the issue.

Adani Wilmar’s Rs 3,600 crore IPO (Initial Public Offering) was fully subscribed on the second day of sale. Retail investors led the charge and oversubscribed their portion while all other investor categories were garnering healthy subscriptions. Shares of Adani Wilmar continue to trade at a premium of around Rs 40-50 per share in the grey market, over the IPO price band of Rs 218-230 apiece. The IPO of the Adani Group company that manufactures the flagship brand Fortune will remain open for Subscription till Monday evening. 

So far the issue has been subscribed to 1.05 times by investors. The retail portion of Adani Wilmar’s IPO has been subscribed 1.74 times with investors bidding for over 8.75 crore shares against the 5.03 crore equity shares on offer. The Non-Institutional Investor (NII) category of the issue has been subscribed 0.84 times while the Qualified Institutional Buyers (QIB) portion has received bids for 91.66 lakh shares or 0.32 times the reserved portion. Employee quota has been subscribed 0.14 times while shareholder reservation has been bid for 0.82 times.

Should you subscribe?

Ventura Securities: Subscribe

Analysts at Ventura Securities have a ‘Subscribe’ rating on the issue with a 24-month price target of Rs 468.8 per share (48.6X FY24 earnings) representing an upside potential of 103.8% from the issue price upper band at INR 230/share. The brokerage firm believes that Adani Wilmar is a proxy play on the high growth underpenetrated packaged foods segment. 

BP Wealth: Subscribe

The brokerage firm has a ‘Subscribe’ rating on the issue while adding that the stock is valued at a P/E of 36.9 x based on FY22 annualized earnings, which is moderately priced compared to its listed peers such as HUL, Britannia, and Dabur, trading at a much higher P/E. “Adani Wilmar is a joint venture that benefits from the synergies of Adani’s in-depth understanding of the local markets & strong logistics across India and Wilmar’s global sourcing capabilities & technical knowhow,” they added.

Ashika Research – Subscribe

At the end of the previous fiscal year, the ROCP market share of Adani Wilmar’s branded edible oil was 18.30%, putting it as the dominant number 1 edible oil brand in India. Analysts added that ‘Fortune’, the well-known flagship brand, is the largest selling edible oil brand in India. “In terms of the valuations, on the higher price band, AWL demands a P/E multiple of 41.8x based on H1FY22 post-issue fully diluted EPS vs industry average of 65x. Considering, AWL’s strong brand recall, wide distribution, better financial track record and healthy ROE, we have a positive view for the IPO,” they added.

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