Adani Wilmar and Sterlite Power file for mega IPOs

Adani Wilmar, may be all set to become the seventh Adani group company to list on the bourses. Adani Wilmar has filed the draft red herring prospectus (DRHP) with SEBI for a proposed Rs.4,500 crore IPO. The finer details of the IPO are yet to be finalized. There is no offer for sale (OFS) proposed and the entire Rs.4,500 crore will be by way of a fresh issue. 

Adani Wilmar has a 22 year pedigree and was formed as a joint venture between the Adani group and Wilmar of Singapore in 1999. Its Fortune Refined Oil is already a very popular brand in the FMCG market. In addition, Adani Wilmar has also forayed into a host of other food ingredients like Basmati rice, suji, atta, besan etc.

Adani Wilmar has set itself a goal of becoming the largest food products company in India by 2027 and towards this end, it will use part of the proceeds for expansion of facilities. In fact, out of the total amount proposed, Adani Wilmar plans to allocate Rs.1,900 crore to expanding existing capacities and investing in new facilities. Another Rs.1,200 crore will be used towards pre-payment of debt to reduce the leverage of the company.

The FMCG business in India enjoys nearly 20% ROE and median P/E in excess of 60X. 

Sterlite Power, part of the Anil Agarwal group, is planning to tap the IPO market with a Rs.3,000 crore issue. The company is yet to file the DRHP with SEBI and has just about hired merchant bankers for the proposed share sale. The DRHP is expected to be filed in Sep-21.

Sterlite Power was a unit of Sterlite Technologies till 2016. Currently, Sterlite Power has infrastructure projects of about 13,700 circuit KM and 26,100 megawatt ampere. These projects are predominantly spread across India and Brazil. Sterlite Power was also the sponsor of Indi Grid INVIT and still retains a 26% stake.

The Sterlite Power issue is also expected to substantially be a fresh issue, with limited or no OFS component.