Adani Wilmar IPO can give edible gains, say analysts

Brokerages are mostly positive on the Rs 3,600-crore initial public offering (IPO) of Adani Wilmar (AWL), which opened for subscription on Thursday and will close on Monday.

The IPO is available in the price band of Rs 218 to Rs 230 per share. Investors can bid for a minimum of 65 shares and in multiples thereafter. The edible oil major’s products have a strong brand recall, say K R Choksey and Investmentz, recommending investors to subscribe to the IPO. It is among the top five fastest-growing packaged food companies in India, with Fortune as its most popular brand.

HDFC Securities said AWL has a comprehensive packaged consumer products portfolio catering to most daily essentials of an Indian kitchen, while the flagship brand Fortune has a strong brand recall.

The firm has the largest distribution network among all branded edible oil companies in India, said Angel One and Choice Broking, giving it a ‘subscribe’ rating.

The allotment of the shares will be decided by February 3, and successful bidders will get the shares credited to their demat accounts by February 7. The shares shall be listed on February 8.

Recommending a subscribe rating, Arihant Capital said the firm has marquee global customers with long-term relationships and uses innovative AI-driven solutions.

In terms of valuations, the post-issue trailing twelve months PE works out to 37.6 times at the upper end of the issue price, said Angel One.

This is reasonable considering AWL’s historical top line and bottom line CAGR of around 13 per cent and 39 per cent, respectively.