Please refer to important disclosures at the end of this report
1
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
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
0.9
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.
Subscribe
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
2
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
3
Exhibit 2: Consolidated Profit & Loss Statement
Y/E March (` cr)
FY2019
FY2020 FY2021
Net Sales
28,797
29
,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
21
58
75
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
4
Consolidated Balance Sheet
Y/E March (` cr) FY2019 FY2020 FY2021
SOURCES OF FUNDS
Equity Share Capital
114
114
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
8
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
95
51
81
Total Assets
4,324
5,311
5,492
Source: Company, Angel Research
Adani Wilmar Ltd| IPO Note
January 24, 2022
5
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
0
0
0
Inc./(Dec.) in loans
(424)
396
(395)
Dividend Paid (Incl. Tax)
0
0
0
Interest / Dividend (Net)
(338)
(404)
(336)
Cash Flow from Financing
(762)
(8)
(731)
Inc./(Dec.) in Cash
(3)
267
(289)
Opening Cash balances
82
79
346
Closing Cash balances
79
346
57
Source: Company, Angel Research
Adani Wilmar Ltd| IPO Note
January 24, 2022
6
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
0.9
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)
51
47
47
Receivables (days)
16
11
15
Payables (days)
31
18
10
Working capital cycle (ex-cash) (days)
36
40
52
Source: Company, Angel Research
Adani Wilmar Ltd| IPO Note
January 24, 2022
7
Research Team Tel: 022 - 40003600 E-mail: resear[email protected]elbroking.com Website: www.angelone.in
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