Post demerger, Adani Wilmar eyes aggressive business expansion
Adani Wilmar aims to double its food and FMCG revenue in 3-4 years through organic and inorganic growth. The company is open to acquiring regional brands in staples and kitchen essentials, with a focus on spices. A demerger from Adani Enterprises will allow Adani Wilmar to pursue collaborations and expansion independently. The company plans two capex programs worth Rs 2,200 crore and Rs 1,200 crore to expand capacities. Edible oils and food & FMCG segments are expected to grow at 7-8% and 30% annually, respectively.
Adani Wilmar, maker of the Fortune brand of edible oils, will pursue both organic and inorganic growth opportunities, as it seeks to double its revenue from the food and fast-moving consumer goods (FMCG) vertical in the next 3-4 years.
In a conversation with FE, Angshu Mallick, CEO & MD, Adani Wilmar said that the company was open to inorganic opportunities within regional branded staples including areas such as spices, which it saw as a natural extension to its business.
“We are clear that staples and kitchen essentials are where we want to be and we are not veering away from this strategy. Regional brands may not have the bandwidth to expand like the way national players do. It gives us an opportunity to look at them from an acquisition perspective,” Mallick said.
Last week, Adani Group flagship Adani Enterprises said its board had approved the demerger of its food and FMCG business to Adani Wilmar. The move will see the promoter stake in Adani Wilmar fall to 77% from 88% now in line with the Securities and Exchange Board of India (Sebi) guidelines. Public shareholding will increase from 12% to 23% after the transaction. The firm was listed in February 2022 on the bourses.
Additionally, Adani Wilmar will be able to pursue collaborations and expansion initiatives independently, Adani Enterprises said, following the transaction. On the table, is a potential stake sale in Adani Wilmar to strategic investors including private equity or food companies, industry sources said. In the past, the Adani Group had to defer stake sale plans in Adani Wilmar over valuation concerns.
In terms of organic expansion, the company has planned two capital expenditure programmes: one of Rs 2,200 crore, which would be completed by the end of the ongoing fiscal (FY25); second capex programme of Rs 1,200 crore, would be completed by March 2026 (FY26).
The two capex programmes would help the company expand capacities across business verticals as it sought to increase turnover over the next few years. The company closed FY24 with a topline of Rs 51,262 crore, with an underlying volume growth of 10%.
The food and FMCG vertical, which achieved a topline of nearly Rs 5,000 crore in FY24, accounts for 17% in volume and 10% in value. While edible oils, with a FY24 topline of Rs 38,788 crore, accounted for 62% in volume and 76% in value terms.
In the medium term, edible oil is seen growing at 7-8% per annum and food and FMCG at 30% annually. Acquisitions are viewed as the fastest and easiest way to enter a segment and ramp up sales, sector experts said.
Source Link : https://www.msn.com/en-in/money/markets/post-demerger-adani-wilmar-eyes-aggressive-business-expansion/ar-AA1odSMM
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