Adani Wilmar Shares Surge 5% After 3 Sessions; What is Fueling the Stock Rally?


Adani Wilmar share prices on BSE and NSE rose nearly five per cent on Thursday after trading in the red zone for the past three days. A lot of buying was seen after an Edellwiess report said that AMFI market cap categorization of stocks would include LIC along with Adani Wilmar as the potential stocks to get the large-cap tag. AMFI is expected to release the new categorisation in the first week of next month.

Shares of Adani Wilmar rose 5 per cent to Rs 677.15 against the previous close of Rs 644.95 on BSE. It also touched an intraday low of Rs 632, falling 2.01 percent on BSE. In a month, the stock has fallen 10.57 per cent.

Another factor that fuelled the stock today, was an analysis by Edelweiss which said Adani Wilmar may enter the Nifty Next 50 index. In the upcoming Nifty September Review, Edelweiss’ Alternative & Quantitative Research preliminary analysis for Nifty indices said the newly listed LIC may also enter the Nifty Next 50 index.

In May, ICICI Securities, said that “Adani Wilmar (AWL) is a strong market leader (50:50 JV between Adani Group and Wilmar) in branded edible oil and industry essentials with aspirations to further scale-up packaged foods. Strong competitive advantages (price-laddering, oil segments, scale, market intelligence (courtesy Wilmar)) in edible oil provide AWL with an edge over competition. Further, AWL enjoys multiple synergies across all three business segments which augur well for scale up of packaged foods business – a) scale in procurement & logistics, b) brand recall of ‘Fortune’ and c) readily available distribution and mix-load supply chain benefit from edible oil. We model revenue / EBITDA / PAT CAGR of 9 per cent/24 per cent/35 per cent over FY22-24E. We initiate coverage on the stock with HOLD rating and SoTP-based TP of Rs550.”

Shares in the firm, a joint venture between the group controlled by Asia’s richest person Gautam Adani and Singapore’s Wilmar International Ltd., have outperformed 121 Asian initial public offerings worth over $100 million this year. Almost two-thirds of the region’s new listings are in the red as rising interest rates and the war in Ukraine take a toll.

The Monetary Authority of Singapore and Nippon Life India were among investors in Adani Wilmar’s IPO, which makes Fortune brand cooking oils, wheat flour, rice, pulses, sugar and other food products. The firm said it would use part of the funds in the $486 million offering to expand facilities, repay loans and make strategic acquisitions.

Adani Wilmar stated in a BSE filing that it will be interacting with investors or analysts on June 3.

“Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we hereby inform that the Company will participate in the interaction with investors/analysts,” Adani Wilmar Limited said in the statement.

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