Edible oil major Adani Wilmar Ltd (AWL) has drawn down the size of its initial share-sale to Rs 3,600 crore from the Rs 4,500 crore finagled before, it was reported on Friday. Out of the IPO proceeds, Rs 1,900 crore will be used for capital expenditure. Rs 1,100 crore will be used for the repayment of debt and Rs 500 crore in funding strategic assets and investments.
According to the draft red herring prospectus, it was keen on raising Rs 4,500 crore from the market by issuing fresh shares. The move to shorten the IPO size is perceived to be an exemplary move by investors as the problem size optimisation will help the company have a better return of capital employed (ROCE) and return on equity (ROE).
The 50:50 joint-venture entity between Ahmedabad-based Adani Group and Singapore’s Wilmar International is not only billionaire Gautam Adani’s flagship consumer goods company. It is also one of the largest fast-moving consumer goods (FMCG) giants in the country that is now going public.
The company might purchase a model or a company engaged in meals, staples and value-added product classes. AWL, which is among the multiple main meals FMCG firms in India with revenues of Rs 37,195 crore, plans to aggressively take a look at M&A (merger and acquisition) prospects within the meals area.