After weak debut, Adani Wilmar shares surge as buyers jump in
- Adani Wilmar IPO, that was open from January 27 to January 31, received more than 17 times subscription
Shares of Adani Wilmar made their stock market debut on Tuesday by listing at ₹227 apiece on the NSE, a discount of over 1% as compared to its IPO issue price of ₹230, though later surged to ₹250. The Adani Group stock closed over 20% higher at ₹265 per share on its first day on BSE.
“The tepid listing of Adani Wilmar can be attributed to weak market sentiments otherwise fundamental and valuations were good for this IPO. Those who applied for listing gain can maintain a stop loss of 200 while long-term investors should hold it. New investors can also look at buying opportunities at initial weakness,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
The company had opened its three-day initial public offering (IPO) on January 27 and the issue closed on January 31. The issue was subscribed more than 17 times. The edible oil major on Friday finalised the issue price of its ₹3,600 crore initial share sale at ₹230 per share.
The initial share sale of Ahmedabad-based Adani Wilmar, a joint venture between Adani Group and Wilmar Group of Singapore, comprised only fresh issue of equity shares.
The proceeds of the public issue will be used to fund capital expenditure, reduce debt and for acquisitions as the company seeks to become India's biggest food and FMCG company.
As per the Red Herring Prospectus (RHP), the company proposes to utilise ₹1,900 crore for capital expenditure, ₹1,058.9 crore for repayment/ prepayment of its borrowings and ₹450 crore for funding of strategic acquisitions and investments.
Incorporated in 1999, Adani Wilmar is an FMCG food company offering most of the essential kitchen commodities, including edible oil, flour, rice, pulses and sugar. The company sells cooking oils under the Fortune brand. Apart from cooking oils, it sells food products like rice, wheat flour, and sugar. It also sells non-food products like soap, handwash, and sanitisers. Adani Wilmar is the seventh Adani group company to list on the Indian stock exchanges.
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