Of the recently listed shares, Adani Wilmar Ltd. of the Adani Group an outlier. The company has nearly tripled since its debut, with most newcomers in the red. Adani Wilmar Shares, a joint venture between the group controlled by Asia’s richest person, Gautam Adani, and Wilmar International Ltd. from Singapore, have outperformed 121 Asian IPOs worth more than $100 million this year, according to a Bloomberg report.
Adani Wilmar’s share price has been in the consolidation phase for the past month. In the past month, it is down nearly 21 percent. However, the stock is one of the multibagger stocks in 2022 as it delivered nearly 135 percent returns for its shareholders in 2022.
Yesterday, however, the stock price started a downward spiral, reaching an intraday low of Rs 631.65 per share, hitting the lower circuit in the third straight session. According to stock market experts, rising input costs and lowering edible oil prices in the domestic market may continue to dictate the shares of edible oil producers, so one should avoid taking a new position in the scrip.
The Monetary Authority of Singapore and Nippon Life India were among the investors in Adani Wilmar’s IPO. The company makes Fortune-branded cooking oils, wheat flour, rice, pulses, sugar and other food products. Under the rationale behind the public offering, it would use some of the funds in the $486 million offering to expand facilities, repay loans and make strategic acquisitions.
Market analysts expect Adani Wilmar to continue to gain market share thanks to its strong distribution network, diversified product portfolio and market. “The company is expected to “continue to gain market share thanks to a strong distribution network, diversified product portfolio, market leadership in key categories, focus on the nationwide market, new product launches and strong heritage,” said Vikrant Kashyap, an analyst at KR Choksey told Bloomberg.
Adani Wilmar, who paid off debts with money from the IPO, is getting “significant benefit” from his parents, Kashyap wrote in a note this month, recommending that the shares pile up. The note further stated that expected acquisitions will lead to gains in market share. The company recently announced the purchase of several brands, including Kohinoor cooking brand for the India region.
Founded in 1999 as a joint venture between Adani Group and the Wilmar Group, Adani Wilmar Ltd (AWL) is an FMCG food company offering most of the essential kitchen products for Indian consumers including edible oil, wheat flour, rice, pulses and sugar. The company’s product portfolio includes 3 categories: (i) edible oil, (ii) packaged foods and FMCG, and (iii) essential industrial products.
Speaking of the other publicly traded stocks of the Adani Group, Adani Power Ltd., up more than 200 percent this year, is the best-performing member of the S&P BSE 500 index. Elsewhere, Adani Green Energy Ltd., up 65 percent year-to-date, is the fifth best performer, even though the company lacks analyst coverage. Overall, every share of Adani Group has performed well.
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