The company plans to further strengthen its play in the staples category and launch more products such as functional oil, fortified staples, and packaged and ready-to-eat and ready-to-go food products.
Bullish on its flagship brand Fortune, IPO-bound Adani Wilmar is aiming to be the largest food brand in India.
The ambitious plan pits Adani Wilmer directly against the likes of ITC, Tata Consumer Products, Marico (already a competitor with Saffola), which are also trying to build a larger food play.
“Fortune is the top edible oil brand in India and we are building it to become the largest food brand in India. There are actually very few national food brands and, to be successful in it, a company needs strong sourcing, manufacturing, supply chain and research capabilities. We, at Adani Wilmar, have all these in place,” the company’s management said during a virtual press briefing to share its IPO blueprint.
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Adani Wilmar plans to launch more products in functional oil, fortified staples and packaged and ready-to-eat and ready-to-go food products as it sets its sight on the food segment. The company’s management indicated it is also open to looking at inorganic opportunities, especially, in the value-added foods space.
“We will focus on staple food products and after we have in place good quality staples production, we will look at value-added food products and might consider inorganic opportunities of growth in this segment,” said Angshu Mallick, CEO, Adani Wilmar.
The Adani Wilmar offer will open for subscription on January 27 and close on January 31. It will list on exchanges on February 8. The company has set the price of the public issue at 218-230 per share and plans to raise Rs 3,600 crore. Out of this, Rs 1,900 crore will be utilised for capital expenditure, Rs 1,058.90 crore for debt repayment, and Rs 450 crore will go towards strategic acquisition and investment, the company said.
Adani Wilmar’s product portfolio can be divided into three segments – edible oils, food products, and FMCG and industry essentials. In sales volume terms, edible oil contributes about 65 percent of its business, 11 percent is drawn from food products, and 23-24 percent from industry essentials, according to the company.
While its edible oil business, said the management, is growing at 6-7 percent, the food business records a growth of 25-30 percent. The company’s revenue from operations averaged an annual compounded growth rate of 14 percent from Rs 28,400 crore in FY19 to Rs 37,100 crore in FY21.
“The edible oil is a mature business but food business is seeing rapid growth as consumers move to branded staples from the unbranded segment. We have seen edible oil follow a similar trajectory and when we started edible was only 14 percent branded and today it is 73 percent,” said Mallick.
“We are seeing a very clear shift towards branded product consumption driven by convenience, healthy eating trends, and rising middle class,” he added.
The company is tapping its edible oil distribution network, which is its largest, for retailing food products. Out of 4 million outlets selling staples in the country (as per Nielsen), Adani Wilmar is present in about 1.6 million outlets and has 5,500 distributors.
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“Our distribution for edible oil is by far the largest in the country and this strength helps us in pushing our food staple too. About 65 percent of our distributors for food and edible are common,” he said.
“The edible oil is a mature business but food business is seeing rapid growth as consumers move to branded staples from the unbranded segment,” said Mallick.
Launched in 1999, Adani Wilmar is a 50:50 joint venture between Gautam Adani’s Adani Group and Singapore-based Wilmar Group. In its initial days, the company focussed on edible oils and industry essentials and forayed into staples and then later other food products in 2013 by expanding the Fortune range.
The company now sells edible oils, staples such as wheat flour, rice, sugar, pulses, etc. It also entered the ready-to-cook category by launching khichdi under Fortune brand last May.
