What GMP signals after finalisation of share allotment
Adani Wilmar IPO: After the finalisation of share allocation, bidders of Adani Wilmar IPO (Initial Public Offering) are eagerly waiting for the share listing of Adani Wilmar, which is most likely on 8th February 2022. Despite trend reversal in the secondary market, Adani Wilmar share price has jumped in the grey market. According to market observers, shares of Adani Wilmar are available at a premium of ₹30 in the grey market.
Adani Wilmar IPO GMP
Market observers said that Adani Wilmar IPO GMP today is ₹30, which is ₹5 higher from is yesterday’s grey market premium of ₹25. They said that after hitting a GMP of ₹16, Adani Wilmar IPO grey market premium has been able to go up to ₹30 that is because of the trend reversal in the secondary market. However, there has been sharp selloff in the stock market in last two days and it has pull down Adani Wilmar IPO GMP as well. In last two days, Adani Wilmar IPO GMP has come down from ₹45 to ₹30, which is understandable. However, they maintained that the way stock market has fallen in last two days, Adani Wilmar IPO GMP should have once again gone down to ₹15 levels, but it is at ₹30, which is praiseworthy.
What this GMP mean?
Market observers said that GMP is nothing but an expected listing premium being indicated by the grey market. As Adani Wilmar IPO GMP today is ₹30, it means grey market is expecting this public issue to list at around ₹260 ( ₹230 + ₹30), which is around 13 per cent higher from its price band of ₹218 to ₹230 per equity share.
However, secondary market experts said that GMP is not an ideal indicator about the expected listing fain as it has nothing to do with the balance sheet of the company.
Speaking on the fundamentals in regard to Adani Wilmar IPO; Aprajita Saxena, Research Analyst at Trustline Securities said, “Adani Wilmar enjoys a leadership position in branded edible oil and packaged food business. It has strong brand recall and broad customer reach coupled with
a diversified products portfolio and market leading brands. It is largest oleochemical manufacturers in India with Pan India network and robust distribution infrastructure. Demographic change, increase in e-commerce reach, increasing household consumption and supportive government policies are the strong tailwinds of the company.”
Commenting upon the business model and other fundamentals of Adani Wilmar IPO; Abhay Doshi, Founder at UnlistedArena.com said, “Adani Wilmar is one amongst the few large FMCG food companies. Their flagship brand “Fortune” is the largest selling edible oil brand in India. The offer is priced at a post-issue PE of 41x based on FY21 figures. The revenues and EBITDA are growing at a CAGR (2015-2020) of 11.28% and 20.65% respectively. The concern of low PAT margins is addressed by focusing on value-added products and diversifying revenue streams. The distribution network of Adani Wilmar is the largest in edible oil segment.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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