Gautam Adani’s company is Asia’s best-performing IPO

Gautam Adani's company

Adani Wilmar Ltd., based in India, is an outlier among Asia’s newly listed stocks. While most newbies are trading under water, the food company has nearly tripled in value since its inception.

Shares in the company, which is a joint venture between Gautam Adani’s business and Singapore’s Wilmar International Ltd., have outpaced 121 Asian initial public offerings totaling more than $100 million this year. As a result of rising interest rates and the conflict in Ukraine, nearly two-thirds of new listings in the region are in the red.

Adani Wilmar, which produces Fortune brand cooking oils, wheat flour, rice, pulses, sugar, and other food items, had investors included the Monetary Authority of Singapore and Nippon Life India. Part of the $486 million investment will be used to expand facilities, repay loans, and make strategic acquisitions, according to the company.

According to Vikrant Kashyap, an analyst at KR Choksey, the company is projected to “continue to gain market share on account of robust distribution network, varied product portfolio, market leadership in key categories, focus on rural market, new product launches, and strong parentage.”

Adani, one of Asia’s busiest dealmakers, is broadening his reach after years of focusing on coal and infrastructure-related investments. After completing 32 acquisitions in the past year, the tycoon’s decision to diversify into new industries such as data centres and digital services has paid off.

Kashyap wrote in a note this month, recommending the company as accumulate, that the JV, which paid off debt with money from the IPO, receives “substantial benefit” from its parents. He noted that expected acquisitions will result in a market share gain. The company recently announced the acquisition of many brands, including the Indian cuisine brand Kohinoor.

Other Adani-related stocks have also performed strongly. The S&P BSE 500 index’s top performer this year is Adani Power Ltd., which is up more than 200 percent. Adani Green Energy Ltd. is the fifth best performer year-to-date, despite the fact that it has no analyst coverage.

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