Adani Wilmar IPO: Adani Wilmar Limited (AWL), a giant edible oil company that sells oil under the Fortune brand name, has cut the IPO size.
Adani Wilmar IPO: Adani Wilmar Limited (AWL), the giant edible oil company that sells Fortune oil, has cut the IPO size. According to the information received from the sources, earlier the company was preparing to bring an IPO of Rs 4500 crore but now its size has been reduced to Rs 3600 crore. According to the information, this IPO can come this month in January 2022. After the listing, it will become the seventh company of the Adani Group to be listed on the Indian stock exchanges. At present, six companies of the Adani Group are Adani Enterprises, Adani Transmission, Adani Green Energy, Adani Power, Adani Total Gas and Adani Ports and Special Economic. Zones (Adani Ports and Special Economic Zone) are listed.
Adani Wilmar is a joint venture between Ahmedabad-based Adani Group and Singapore-based Wilmar Group, in which both groups hold half-half. It is an FMCG food company that sells cooking items like cooking oil, wheat flour, rice, pulses and sugar. Apart from this, Oleochemicals also sells industrial products like castor oil and its derivatives and de-oiled cakes.
The money raised will be used like this
Under the IPO of Adani Wilmar, only new shares will be issued i.e. the existing shareholders and promoters will not reduce their stake under the Offer for Sale (OFS). The company has decided to reduce the issue size from Rs 4500 crores to Rs 3600 crores and as per the information, the company will reduce the share of general corporate purposes only for this and there will be no change in the main objectives fixed for the issue. will not be cut.
Rs 1,900 crore raised through new shares will be used for capital expenditure, Rs 1,100 crore for debt servicing and Rs 500 crore for strategic acquisitions and investments. The company may acquire companies or brands of Foods, Staples and Value Added Products.
Despite reducing the size, there is no possibility of reducing the cash
According to the information, the response of investors on reducing the size of the IPO can be positive as it will help the company to improve the return on capital invested (ROCE) and return on equity. This also indicates that the company can generate better revenue even with minimal investment. Despite reducing the IPO size, the company will not be short of cash as it will repay the entire long-term debt of Rs 1,100 crore, which will save interest and will also fund the company’s capital expenditure through equity.