With the Adani Group offloading up to 20% of its stake through an offer for sale (OFS), the market is buzzing with questions. Is this a fleeting chance to buy into a leading FMCG player at a discount, or a sign to tread carefully? The stakes are high, and so is the curiosity — let’s break it all down to make sense of this unfolding scenario.
The key points shaping this discussion:
- OFS Details: A 20% stake is being divested at a floor price of ₹275, a 15% discount to the pre-announcement price.
- Stock Reaction: The share price dropped 10% on January 10, 2025, and has continued to slide, declining up to 9% in early trade by January 13.
- Performance Snapshot: The stock is down 18.69% over the past year and 47% over the last two years.
Now, about those numbers. Adani Wilmar’s current valuation metrics show a P/E ratio of 39.72, a P/B ratio of 4.56, and a P/S ratio of 0.69. While those figures point to strong investor confidence, here’s the kicker: the stock is trading at an 818% premium to its estimated intrinsic value. That raises the question — does this discount really make it a bargain?
But it’s not all gloom. The company has solid fundamentals. Adani Wilmar posted a 24% year-on-year volume growth in its FMCG portfolio in the December quarter. And let’s not forget its dominance in the market with brands like Fortune Oil. These factors are keeping its long-term story intact, but the near-term volatility might give some investors pause.
Short-term risks are definitely in play. A stake sale of this size tends to weigh heavily on stock prices, and the FMCG sector itself isn’t immune to challenges like rising input costs. If you’re thinking about jumping in, it’s worth considering that more price swings could be on the horizon.
So, what’s the takeaway here? The ₹275 OFS price might seem appealing, but it’s important to look beyond the discount. Consider how the company’s premium valuation, ongoing price pressure, and market position align with your investment strategy. This isn’t just about finding a “cheap” entry, it’s about understanding whether the risks match your goals.
Adani Wilmar’s large stake sale has turned into a hot topic, sparking intense debate among investors.