Adani Group Stock Surges 6% Following ₹603 Crore Deal to Acquire G.D. Foods
Adani Group Stock : In a significant development, Adani Wilmar Limited (AWL), one of India’s largest consumer food FMCG companies, saw its stock surge by nearly 6.6% on the National Stock Exchange (NSE) during Wednesday’s trading session. This surge follows the announcement of a definitive agreement to acquire 100% of G.D. Foods Manufacturing (India) Private Limited, a leading player in the sauces and pickles sector and the owner of the popular “Tops” brand.
Price Movement and Market Overview
Adani Wilmar’s stock showed strong bullish movement on Wednesday. With a market cap of ₹33,128.8 crores, the shares were trading at ₹254.9 by 11:46 a.m., marking an increase of around 6.3% compared to its previous closing price of ₹239.8. Despite this recent surge, the stock has delivered negative returns of nearly 30% over the past year. However, there has been some positive momentum in the last month, with the stock showing approximately 6% returns.
Details of the Acquisition
Adani Wilmar’s decision to acquire G.D. Foods comes as part of its broader strategy to expand its portfolio of value-added food products. The acquisition agreement, valued at ₹603 crores, will be carried out in multiple tranches. The first tranche will involve the acquisition of 80% of G.D. Foods’ shares, while the remaining 20% will be acquired over the next three years.
The acquisition price is based on a debt-free and cash-free valuation, reinforcing Adani Wilmar’s commitment to enhancing its consumer offerings. The deal is subject to customary closing conditions, and the first tranche is expected to be completed within 60 days. To fund this transaction, Adani Wilmar will rely on its internal accruals or proceeds from the initial public offering (IPO) that it recently undertook.
Expanding the Portfolio: G.D. Foods’ Brand ‘Tops’
G.D. Foods, founded in 1984, is well known for its flagship brand “Tops,” which offers a wide range of high-quality products. These products include tomato ketchup, snack sauces, specialty sauces, jams, pickles, noodles, and essential cooking ingredients like vinegar, baking powder, and cake mixes. The acquisition will allow Adani Wilmar to tap into the growing demand for value-added food products in India.
In FY24, G.D. Foods reported a revenue of ₹386 crores, achieving an impressive 3-year compound annual growth rate (CAGR) of 15%. Additionally, the company posted an EBITDA of ₹32 crores, showcasing its strong financial position within the sector. The acquisition of G.D. Foods further solidifies Adani Wilmar’s vision to become a dominant player in the Indian FMCG sector, meeting the diverse kitchen needs of households across the country.
Adani Wilmar’s Financial Growth
Adani Wilmar’s financial performance for the current fiscal year demonstrates a strong growth trajectory. The company reported a 31.4% increase in revenue from operations, rising from ₹12,828 crores in Q3 FY24 to ₹16,859 crores in Q3 FY25. Moreover, its net profit saw an impressive 104.5% growth, jumping from ₹201 crores to ₹411 crores year-on-year.
These figures underscore the company’s robust financial health and its ability to generate significant shareholder value, despite challenges in the broader market. The company’s flagship brand, “Fortune,” continues to dominate the Indian market, reaching over 121 million households across the country.
About Adani Wilmar
Adani Wilmar Limited is a joint venture between the Adani Group of India and the Wilmar Group of Singapore. The company operates primarily in the fast-moving consumer goods (FMCG) space, with a focus on edible oils and food products. In addition to its popular edible oil brand “Fortune,” the company is also involved in essential commodities such as castor derivatives, oleo derivatives, and de-oils cake.
AWL has a strong manufacturing base in India, with 24 plants spread across 10 states. These plants include 10 crushing units, 19 refineries, and food processing capacities. Notably, its refinery in Mundra is the largest single-location refinery in India, with a designed capacity of 5,000 tons per day.
Financial Ratios of Adani Wilmar Limited
| Financial Parameter | Value |
|---|---|
| Market Cap | ₹33,272 Cr. |
| Current Price | ₹256 |
| High / Low | ₹404 / ₹232 |
| Stock P/E | 27.4 |
| Book Value | ₹68.6 |
| Dividend Yield | 0.00 % |
| ROCE | 10.4 % |
| ROE | 3.65 % |
| Face Value | ₹1.00 |
| Promoter Holding | 74.4 % |
| Price to Book Value | 3.76 |
| Debt to Equity | 0.22 |
| Pledged Percentage | 0.00 % |
| Industry P/E | 21.8 |
| Graham Number | ₹120 |
| Intrinsic Value | ₹114 |
| RSI | 37.6 |
| EPS | ₹9.35 |
| No. of Equity Shares | 130 Crore |
| PEG Ratio | -6.87 |
| DMA 200 | ₹314 |
| Free Cash Flow (3 Years) | ₹-26.5 Cr. |
| Free Cash Flow | ₹-545 Cr. |
| Debt | ₹2,001 Cr. |
| Free Cash Flow (5 Years) | ₹416 Cr. |
| Return on Assets | 1.54 % |
Conclusion
Adani Wilmar’s acquisition of G.D. Foods aligns with its strategy of strengthening its portfolio and expanding its footprint in the Indian food FMCG sector. The deal enhances its offering in the sauces and pickles category and provides it with an opportunity to cater to the growing demand for value-added food products. With strong financial growth and a strategic acquisition, Adani Wilmar is well-positioned to remain a key player in the rapidly expanding FMCG market in India.
As the company continues to execute its strategic vision, it will be interesting to see how the integration of G.D. Foods accelerates its growth, propelling it further toward market leadership. With this acquisition and strong financials, Adani Wilmar’s stock is expected to continue its upward trajectory in the coming months.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.