Adani Wilmar makes tepid listing

Adani Wilmar opened for Rs 3,600 crore IPO on 27th January. It received a good response from the investors as the IPO got subscribed 17.37 times during the subscription window. The highest interest was received from Non-institutional investors and the portion got subscribed by 56.30 times. The retail investors and qualified institutional portion were subscribed 3.92 and 5.73 times, respectively.

The company proposes to utilize Rs 1,900 crore for capital expenditure, Rs 1,058.9 crore for repayment/ prepayment of its borrowings, and Rs 450 crore for funding strategic acquisitions and investments.

The post-issue P/E works out to 37.6x (at the upper end of the issue price band), which is reasonable considering Adani Wilmar's historical topline & bottomline CAGR of around 13% and around 39% respectively over FY19-21. For the above reason, most analysts have given a buy rating.

The issue price was Rs 230 and it opened at Rs 221 on the BSE and Rs 227 on the National Stock Exchange. The tepid listing of Adani Wilmar can be attributed to weak market sentiments. SENSEX is down by more than 300 points on Tuesday. However, post the tepid listing, investors grabbed the opportunity to buy the stock below the issue price which caused the price increase. At 11.30 am, the stock was high more than 10% and trading at Rs 252 per share.

Subscription status as on 31st January 2022 (End of Day 3)