Adani Wilmar IPO

Incorporated in 1999, Adani Wilmar limited a joint venture between Adani Group and the Wilmar Group.

Adani Wilmar is an FMCG food company offering most of the essential kitchen commodities for Indian consumers, including edible oil, wheat flour, rice, pulses, and Sugar.

The Company also offers a diverse range of industry essentials, including oleochemicals, castor oil and its derivatives, and de-oiled cakes. The company's products are offered under a diverse range of brands across a broad price spectrum and cater to different customer groups.

The company's product portfolio is categorized into (i) edible oil, (ii) packaged food and FMCG, and (iii) industry essentials.

• "Fortune", the company's flagship brand, is the largest selling edible oil brand in India. Recently the company has included products such as edible oil products, rice bran health oil, fortified foods, ready-to-cook soya chunks, khichdi, etc. in its offerings.
• It is among the top 5 fastest growing packaged food companies in India, based on the growth in revenues during the last five years.
• The company has strong raw material sourcing capabilities and was India's largest importer of crude edible oil as of March 31, 2021. which provided it with bargaining power to source better quality raw materials on favorable commercial terms.
• The company operates 22 plants located across 10 states in India, comprising 10 crushing units and 19 refineries. The company's refinery in Mundra is one of the largest single-location refineries in India with a capacity of 5,000 MT per day.
• The company's distributors are in 28 states and 8 union territories throughout India, catering to over 1.6 million retail outlets. As of September 30, 2021, the company had 88 depots in India, with an aggregate storage space of approx. 1.8 million square feet across the country.

Outlook & Valuation

The Company has shown a strong growth in revenue where it grew from Rs 29,766 cr to Rs 37,195 cr over the period of FY20 to FY21 and during the same period, profit has grown from Rs 460 cr in FY20 to Rs 727 cr in FY21. Again, in the period ended, by September 21, the company reported tremendous growth.

It will be the seventh listed company of the Adani Group, which has already established itself as a brand in the FMCG sector. The company is a leader in branded edible oils and packaged foods in India. The IPO is priced at a P/BV of 7x on a NAV of 28.86 and PE of 36x on its FY21 earnings which are slightly lower than its listed peers. Thus we assign a "SUBSCRIBE" rating to the IPO for listing gain and long term.

KEY MANAGERIAL PERSONNEL

• Mr. Kuok Khoon Hong is the Non-Executive Chairman of the Company. He has over 40 years of experience in the agribusiness industry. He is the co-founder of Wilmar International Limited.
• Mr. Angshu Mallick is the Chief Executive Officer and Managing Director of the Company. He has over 35 years of experience in marketing and sales in the food industry.
• Mr. Shrikant Kanhere is the Chief Financial Officer of the Company. He is a fellow member of Institute of Chartered Accountants of India. He has over 18 years of experience in the field of finance and accounts.
• Mr.Siddhartha Ghosh is the Chief Human Resource Officer of the Company. Previously he also worked at Reliance Industries Limited, Aditya Birla Insulators, Jindal Steel & Power Limited and Coal India Limited.
• Mr. Satendra Aggarwal is the Business Head - Foods & FMCG and Marketing of the Company. Previously he worked as chief operating officer at Ruchi Soya Industries Limited and has also worked at Hindustan Unilever Limited.
• Mr. Ashim Mullick is the Vice President – R&D of the Company. Previously he worked at Tata Chemicals Limited, PepsiCo India Holdings Private Limited, GlaxoSmithKline and has also worked at Hindustan Unilever Limited.
• Mr. Darshil Lakhia is the Company Secretary and Compliance Officer of the Company. He is a member of the Institute of Company Secretaries of India. He has over 14 years of experience in corporate secretarial and other related compliances.

COMPETITIVE STRENGTHS

• Diversified product portfolio with strong brand recall and broad customer reach.
• Leadership in branded edible oil and packaged food business in India.
• Strong raw material sourcing capabilities from top global suppliers.
• Focus on environmental and social sustainability.
• Pan-India distribution network supported by a robust distribution infrastructure.
• Professional management and experienced board.

KEY STRATEGIES

• Become the leading packaged food and FMCG company in India.
• Further expand the distribution network with an omni-channel approach.
• Continue to launch new products and enhance the customer base.

KEY CONCERNS

• Significant dependence on imports of raw materials and/or finished goods in addition to domestic supply.
• Dependence on edible oil segment for a significant portion of revenue.
• Fluctuation in the prices of commodities affects profitability.
• Slowdown or shutdown in its manufacturing operations or under-utilization of its manufacturing facilities.
• Inability to introduce new products and respond to changing consumer preferences in a timely and effective manner.

COMPARISON WITH LISTED INDUSTRY PEERS (AS ON 31ST MARCH 2021)

Name of the Company Total Income for FY2021 (₹ Cr)EPS(Basic)NAV(₹)P/ERoNW (%)Adani Wilmar Ltd37195.76.3728.86[●]22.1% Peer Group Hindustan Unilever Ltd4702834.03202.9969.6316.8%Britannia Industries Ltd13136.177.4148.846.7951.6%Tata Consumer Products Ltd116029.3169.5778.656%Dabur India Ltd9561.79.5843.5759.0522%Marico Ltd80489.0825.2354.0336.8%Nestle India Ltd13350215.98209.4489.73103.1%

FINANCIALS (RESTATED CONSOLIDATED)

Particulars (Rs. In Millions)FY 2021FY 2020FY 2019Equity Share Capital1,142.951,142.951,142.95Other Equity31,838.4624,564.0219,967.12Net Worth32,981.4125,706.9721,110.07Total Borrowings19,040.0823,002.7618,294.56Revenue from Operations370,904.22296,570.36287,974.59EBITDA14,305.5914,194.7512,534.57Profit Before Tax7,566.416,090.135,672.52Net Profit for the year7,276.494,608.723,755.21

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