Please refer to important disclosures at the end of this report

Incorporated 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 commodities for Indian consumers, including edible oil, wheat

flour, rice, pulses, and sugar.

Company’s portfolio of products spans across 3

categories: (i) edible oil, (ii) package

d food and FMCG, and (iii) industry

essentials. They have presence across a wide array of sub-categories wit

hin each

of these 3 categories.

A significant majority of their sales pertain to branded

products accounting for approximately 73% of their edible o

il and food and

FMCG sales volume for the financial year 2021.

Positives: (a)

Diversified product portfolio with leading brands catering to most

daily essentials of an Indian kitchen (b) Strong brand

recall and broad customer

reach (c) AWL has strong manuf

acturing capacity with 22 manufacturing units in

India (d)

AWL has the largest distribution network among all branded edible oil

companies in India with 5,590 distributors.

Investment concerns: Volatility in raw material prices and increase in compet

ition

could impact the profitability of the company.

Outlook & Valuation: In terms of valuations, the post-

issue TTM P/E works out to

37.6x (at the upper end of the issue price band), which is reasonable

considering

AWL’s historical top-line & bottom-line CAGR of ~13% and ~39

% respectively

over FY19-21. Further, Adani Wilmar has strong brand recall, wide distri

bution,

better financial track record and healthy ROE

. Considering all the positive

factors, we believe this valuation is at reasonable levels.

Thus, we recommend a

subscribe rating on the issue.

Key Financials

Y/E March (` cr) FY2019 FY2020 FY2021 1H

FY21

1HFY22

Net Sales

28,797

29,657

37,090

16,189

24,875

% chg

3.0

25.1

53.7

Net Profit

376 461 728

289

357

% chg

22.7

57.9

23.7

OPM (%)

3.9

4.4

3.6

4.1

3.2

EPS (`)

3.3

4.0

6.4

P/E (x)

70.0

57.0

36.1

P/BV (x)

12.5

10.2

8.0

RoE (%)

16.8

15.7

19.8

RoCE (%)

23.6

21.9

20.3

EV/Sales (x)

0.9

0.7

EV/EBITDA (x)

23.7

20.6

20.1

Angel Research; Note: Valuation ratios based on post-issue shares and at `230 per share.

Issue Open: Jan 27, 2022

Issue Close: Jan 31, 2022

QIBs 50%

Non-Institutional 15%

Retail 35%

Promoters 87.9%

Public 12.1%

Post Issue Shareholding Pattern

Post Eq. Paid up Capital: `130.0cr

Issue size (amount): `3,600cr

Price Band: `218-230

Lot Size: 65 shares

Post-issue mkt.cap: `28,528*– 29,900cr**

Promoter holding Pre-Issue: 100.0%

Promoter holding Post-Issue: 87.9%

*Calculated on lower price band

** Calculated on upper price band

Book Building

Fresh issue:`3,600cr

Issue Details

Face Value: `1

Present Eq. Paid up Capital: `114.3cr

Jyoti Roy

jyoti.roy@angelbroking.com

+022 4000 3600, Extn: 6810

Adani Wilmar Ltd

IPO Note |

FMCG

January 24, 2022

Adani Wilmar Ltd| IPO Note

January 24, 2022

Company background

Incorporated in 1999 as 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

focused on value-added products and has launched products such as edible oil

products, rice bran health oil, fortified foods, ready-to-cook soya chunks,

khichdi, etc in line with this.

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. In addition to the 22 plants Adani Wilmar, also used 36 leased tolling units

as of Sep 31, 2021, for additional manufacturing capacities.

As of September 30, 2021, the company had 5,590 distributors in India located

in 28 states, and eight union territories, catering to over 1.6 million retail outlets

(Source: Technopak Report). Further, the company had 88 depots in India, with

an aggregate storage space of approx. 1.8 million square feet across the

country.

Issue details

AWL

is raising

₹

3,600

cr through fresh issue in the price band of

₹

218

230

Exhibit 1: Pre and post IPO shareholding pattern

No of shares (Pre-issue) % (Post-issue)

Promoter 1,142,948,860 100.00%

1,142,948,860

87.92%

Public NA

157,038,646

12.08%

Total 1,142,948,860

100.00%

1,299,987,506

100.00%

Source: Source: RHP, Note: Calculated on upper price band

Objectives of the Offer

 Funding capital expenditure for expansion of existing manufacturing

facilities and developing new manufacturing facilities - ₹1,900cr

 Repayment/prepayment of borrowings – ₹1058.9cr

 Funding strategic acquisitions and investments -₹450cr; and

 General corporate purposes.

Adani Wilmar Ltd| IPO Note

January 24, 2022

Exhibit 2: Consolidated Profit & Loss Statement

Y/E March (` cr)

FY2019

FY2020 FY2021

Net Sales

28,797

,657

37,090

% chg

3.0

25.1

Total Expenditure

27,666

28,348

35,765

Raw Material

24,119

24,451

31,518

Personnel

207

224

322

Others Expenses

3,340

3,672

3,925

EBITDA

1,131

1,310

1,325

% chg

15.8

1.2

(% of Net Sales)

3.9

4.4

3.6

Depreciation& Amortisation

199

241

267

EBIT

932

1,068

1,058

% chg

14.6

(1.0)

(% of Net Sales)

3.2

3.6

2.9

Interest & other Charges

487

569

407

Other Income

122

110

105

(% of PBT)

21.5

18.1

13.9

Recurring PBT

567

609

757

% chg

7.4

24.2

Tax

212

206

104

(% of PBT)

37.4

33.8

13.7

PAT before P/L Asso.Co.

355

403

653

Share in profit of Associates

PAT after P/L Asso.Co.

376

461

728

Basic EPS (Rs)

3.3

4.0

6.4

% chg

22.7

57.9

Source: Company, Angel Research

Adani Wilmar Ltd| IPO Note

January 24, 2022

Consolidated Balance Sheet

Y/E March (` cr) FY2019 FY2020 FY2021

SOURCES OF FUNDS

Equity Share Capital

114

Reserves& Surplus

1,997

2,456

3,184

Shareholders Funds

2,111

2,571

3,298

Total Loans

1,829

2,300

1,904

Deferred Tax Liability

383

440

290

Total Liabilities

4,324

5,311

5,492

APPLICATION OF FUNDS

Net Block

3,027

3,758

3,701

Capital Work-in-Progress

570

325

531

Investments

147

206

332

Current Assets 7,85

7,497

8,763

Inventories

4,042

3,826

4,778

Sundry Debtors

1,258

921

1,515

Cash

1,215

1,432

1,188

Loans & Advances

1,116

1,152

1,150

Other Assets

227

166

132

Current liabilities

7,374

6,526

7,916

Net Current Assets

484

971

847

Deferred Tax Asset

Total Assets

4,324

5,311

5,492

Source: Company, Angel Research

Adani Wilmar Ltd| IPO Note

January 24, 2022

Exhibit 3: Consolidated Cash Flow Statement

Y/E March (` cr) FY2019 FY2020 FY2021

Profit before tax

567

609

757

Depreciation

199

241

267

Change in Working Capital

837

(495)

108

Interest / Dividend (Net)

262

338

260

Direct taxes paid

(134)

(121)

(294)

Others

(39)

209

(172)

Cash Flow from Operations

1693

781

926

(Inc.)/ Dec. in Fixed Assets

(908)

(631)

(462)

(Inc.)/ Dec. in Investments

(26)

124

(22)

Cash Flow from Investing

(934)

(506)

(484)

Issue of Equity

Inc./(Dec.) in loans

(424)

396

(395)

Dividend Paid (Incl. Tax)

Interest / Dividend (Net)

(338)

(404)

(336)

Cash Flow from Financing

(762)

(8)

(731)

Inc./(Dec.) in Cash

(3)

267

(289)

Opening Cash balances

346

Closing Cash balances

346

Source: Company, Angel Research

Adani Wilmar Ltd| IPO Note

January 24, 2022

Key Ratios

Y/E March FY2019

FY2020

FY2021

Valuation Ratio (x)

P/E (on FDEPS)

70.0

57.0

36.1

P/CEPS

47.4

40.8

28.6

P/BV

12.5

10.2

8.0

EV/Sales

0.9

0.7

EV/EBITDA

23.7

20.6

20.1

EV / Total Assets

6.2

5.1

4.9

Per Share Data (`)

EPS (Basic)

3.3

4.0

6.4

EPS (fully diluted)

3.3

4.0

6.4

Cash EPS

4.8

5.6

8.0

Book Value

18.5

22.5

28.9

Returns (%)

ROCE

23.6

21.9

20.3

Angel ROIC (Pre-tax)

36.1

33.0

28.7

ROE

16.8

15.7

19.8

Turnover ratios (x)

Asset Turnover (Net Block)

9.5

7.9

10.0

Inventory / Sales (days)

Receivables (days)

Payables (days)

Working capital cycle (ex-cash) (days)

Source: Company, Angel Research

Adani Wilmar Ltd| IPO Note

January 24, 2022

Research Team Tel: 022 - 40003600 E-mail: research@angelbroking.com Website: www.angelone.in

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