FMCG giant Adani Wilmer filed a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on Monday, August 2. The company aims to raise Rs 4,500 via the initial public offering (IPO).
According to MoneyControl, there will not be any secondary offering. The listing of Adani Wilmar on the stock exchange will further the growth of the company’s operations by increasing its market visibility and awareness among current and potential customers.
The proceedings from the IPO will be used for the expansion of existing manufacturing facilities and the development of new manufacturing facilities. It will also be used for the repayment of the company’s borrowings.
Adani Wilmar aims to be the largest food company in India by 2027. As of March 2021, the market share of its branded edible oil was 18.30%. Along with Adani Wilmar, companies like Gemini Edibles are also planning to open an IPO to raise Rs 1,500 crore to Rs 1,800 crore.
In the financial year 2021-22 (FY21), Adani Wilmar became one of the fastest-growing packaged food companies in the country. In FY21, it registered a growth of 24% in its revenues.
Talking about the risk factors, the company said in the DRHP, “India has recently witnessed the emergence of supermarket and hypermarket chains and online retailers and the market penetration of large-scale organized retail in India is likely to increase further.
While we believe this provides us with an opportunity to improve our supply chain efficiencies and increase the visibility of our brands, it also increases the negotiating position of such stores. We cannot assure you that we will be able to negotiate new distribution agreements or renegotiate our existing distribution agreements going forward, especially our pricing or credit provisions, on terms favourable to us, or at all.”
