Analysts attribute the stock rally to rising oil prices and demand-supply constraint
Foods major Adani Wilmar Limited (AWL) has hit ₹1 lakh crore in market capitalisation as the stock reached new highs on Tuesday.
Adani Wilmar was locked in the 5 per cent upper circuit on Tuesday, up ₹38.20 to record a new high of ₹802.80 on the BSE. It had opened at ₹798.00 as against the previous close of ₹764.60.
At 11:52 am, its m-cap stood at ₹1.04 lakh crore crore on the BSE. The company’s stock is up 249 per cent from its issue price of ₹230.
It was trading at a high of ₹803.15 on the NSE, up ₹38.20 or 4.99 per cent.
The company is the seventh Adani Group firm to enter the ₹1 lakh crore-mark in terms of m-cap. Last week, Adani Power shares had surpassed the ₹1 lakh crore-mark.
The company sells cooking oils and other food products under the Fortune brand, and is a 50:50 joint venture between business conglomerate Adani group and Singapore-based Wilmar.
Analysts attribute the stock rally to rising oil prices and demand-supply constraint.
According to Santosh Meena, Head of Research, Swastika Investmart Ltd., “The Ukraine war has shot commodity prices higher worldwide, Ukraine being the largest exporter of oilseeds like sunflower, and soybean seeds have pushed the edible oil prices. The Indonesian palm oil export ban and Malaysian export tax will further squeeze the oil supply.”
“This whole problem has skyrocketed edible oil prices in India, benefiting companies like Adani Wilmar. The company will have windfall gains via. ynsold inventory revaluation. Further, this situation will improve the overall margins for the company. Due to these factors, the company has crossed the ₹ 1 lakh crore market cap level. However, we advise investors to stay cautious as the stock has moved far ahead from its fundamentals,” added Meena.
The company had made its debut on the bourses in February this year. The ₹3,600-crore initial public offering (IPO) of Adani Wilmar, the joint venture between Adani Group and Wilmar Group of Singapore, was subscribed over 17.37 times. The IPO of the edible oil major which opened between January 27 and 31, had received bids for 212.87 crore shares against an offer size of 12.25 crore shares.
The meeting of the Board of Directors of the company will be held on Monday, May 2, 2022 to consider and approve the Audited Financial Results (Standalone and Consolidated) for the quarter and year ended on March 31, 2022.
Source Name:-thehindubusinessline