what is about willmar group wilmer group is asia's leading agribusiness groups but which is based out of singapore right now let's try and understand with these two groups coming together is there any synergy benefit created or not so basically willmar group brings sourcing capabilities and technical knowhouse okay so you can imagine from the procurement side willmar group has a lot of strength but once after procurement is done production is done then what kind of expertise is required for that adani group brings and brings in the local market expertise advanced logistics experience in trading and that is why i'm saying that these two groups coming together is getting a lot of synergy benefits right now let's try and understand uh what are the three major categories in which this company operates the very first category is the edible oils category
if you see this figure you can understand that 65 percent of their business i'm talking about sales volume wise is contributed by edible oils uh industry essentials 25 and food and fmcg is contributing to 11 but i'm sure you might be interested to know that if i'm talking about edible oils what all things are included in this segment if i'm talking about edible oils it's about uh more of soya palm sunflower mustard all these will be coming under what under edible oils and i'm sure that you might be aware that company's flagship brand is fortune and it is the largest selling edible oil brand in india if i move ahead with the second category second category is about food and fmcg which is contributing to almost 11 percent again i'm repeating sales volume wise now what all things are included in this you can see here again in the chat wheat flour rice pulses beans soya energets all these are into this food and fmcg category remember
what happened in the pre bumper of the video so old olden days first is to go to the grocer bring the wheat then uh whatever sorted take out all the stones right then sieve it i guess that is the correct word right and then uh okay what not i don't know all the english equivalents guys understand my emotions right and then we used to go get it i mean we used to grind that and then finally the atta is to be ready but now with the help of all these online portals we can just quickly order that and that's what happened in the pre-bumper right so wheat flour rice pulses bases all these are what coming under the food and fmcg category so the company's fortune brand again ranks second and third in india in packaged wheat flour and basmati rice respectively in fact company is among the top five fastest packaged food companies india based on the growth in revenues during the last five years by the way many people also ask me ma'am where do you get all these information of course i've taken all this information from the rhp of the company which is the red herring prospectus right followed by the last one it is about industry essentials and in industry essentials
you have castor oil and if i'm talking about industry essentials company is the largest manufacturer of stearic acid and glycerin in india okay i'm going to talk about that a little bit more in the coming section itself so if i go ahead with the manufacturing facilities now okay so all in all i hope you have understood the three major lines of the business which are the three major lines edible oil packaged food fmcg and industry essentials right but for this you need good manufacturing facilities large number of manufacturing facilities where in company is 22 plants across 10 states and these 10 plants comprise crushing units oh sorry plants comprise of 10 crushing units and 19 refineries as well okay companies refinery in mundra is the largest single location refinery in india with a design capacity of 5 000 metric ton per day that's a huge capacity right so currently company has a you know a lot of integrated manufacturing infrastructure facilities wherein number one i'm going to talk about backward and forward integration just to simplify
this process you can understand that their manufacturing plant have crushing units and their manufacturing plants also have refining refinery units right so what happens from this crushing units uh the company is able to take out the oiled cakes and from refineries they take out palm steering and palm oil okay now with these they manufacture what all your chemical products and we with these holochemical products they're able to manufacture products like stearic acid glycerin and if i'm talking about the fmcg applications soap and hand wash right so i hope this was a little bit more to digest if you want you can again rewind and revisit this part uh but i hope all in all you have understood about backward and forward integration also one last point company is currently operating at roughly 50 of their installed capacity well going ahead with the industry analysis india's domestic consumption grew at 11.1 percent cagr between financial years 14 to 19 whereas usa and china grew at 4.3 percent and 8.2 percent respectively so our domestic consumption has been much higher than these two countries but if i'm talk about talking about annual per capita spent on the categories of packaged foods in india on an average per capita uh spend was just 4650 rupees on what packaged food spent category which is very less as compared to china an equivalent of 16 000 inr and usa at an equivalent of one lakh twelve thousand five hundred inr right in fact uh it is believed that the packaged food is set to gear up at higher levels why
because of the concerns and limitations in movement due to covet 19 and also people feel that it's a packaged food and it'll be more safe so maybe the trend can grow in this favor in india as well now if i'm talking about package food retail category let me just focus on the package staples that is edible oil right now if you see here the market size has grown from financial air 15 to financial year 20 at a seven percent cagr
it is expected to grow at six point six percent chr not bad in fact this category generally grows at this rate only so nothing too good nothing too bad stable uh above average i can say then if i'm talking about the presence of large fmcg food companies across kitchen essential commodities so if you remember is general fmcg company no fmcg company with focus on what essential kitchen commodities so here you can see what all things come up come up under this category it's edible oils wheat flour rice pulses sugar and dairy uh fresh package so you can see amongst its peers only adani valmar you can see tick mark in five almost yeah five categories out of six categories so again has a good competitive edge and if i'm talking about the overall financial performance 2019 20 and 21 from the edible oil business their revenues contributed to 74.8 percent 79.16 and 82.23 respectively so i hope you are understanding how important is the edible oil category for this specific business as well so if i move on uh the overall market uh size of this edible oils is almost one lakh seventy nine thousand five hundred crores but out of this the largest chunk is again by whom uh adani vulmar at seventeen percent you will be like what is this sixty percent sixty percent is others all two to two to branch it could be local brands all this put together is 60 percent but one single largest is again adani and see the second largest
that's at eight percent so this is more than double now if i go to edible oil zoom in into it further what all comes under edible oil under edible oil you have palm oil soybean oil mustard oil a lot of things and out of this if you see amongst its peers adani vimer is present in all the categories so again that's the edge that they are having over their competitors now if i'm talking about the overall india's per capita consumption in edible oil it's estimated to be 16 to 70 kgs per annum again which is comparatively lower as compared to the world average of almost 24 kgs per annum now if i'm comparing this with pakistan bangladesh and china still it's 1919 and 21.5 kgs and believe it or not in the western world this has an average of 40 kilograms per person per annum uh as per a report that i read again it mentioned that in the refined oil in consumer packs category their market share of branded edible oils was at 18.3 percent at 31st march 2021. now let's start with the financials if you can see revenue from operations has gone up from 287 000 million rupees to 370 000 million rupees of course
i'm rounding off the figures right uh the ca of revenue is coming to almost eight point eight percent if you see even ebitda is positive with a char of almost 4.5 percent and cigar of pbt is 10.07 percent if i go into the final figure in the pian dial
you can see the restated profit for the year has gone up from 375 million rupees to 7276 million rupees with a cagr of i mean pat cage are of 24.67 percent wow feels good to read pat positive figure and that too with a nice cag right now if i move by with the balance sheet nothing great i mean nothing to be discussed in the asset side but if i go on to the liability side equity and liabilities you can see other equity that is nothing but reserves and surplus that is going up continuously in the upward trajectory from nineteen thousand six nine sixty seven million to thirty one thousand eight hundred and thirty eight millions there are certain borrowings in the company but we are also going to talk about the debt to equity ratio which is absolutely in an okay zone plus the ipo proceeds are also going to lower that down further now if i move ahead with the cash flow statement you can see i'm mainly going to focus only on operating activities it is positive very much in positive you can see that there has been a drop but that is mainly because of changes in inventory nothing worrying as such going on with the ratio analysis you can see that their debt to equity ratio which i was just talking about is at a decent enough level of 0.54 current ratio is greater than 1 ebitda is also decent enough pvt numbers pat all in all okay roe and roce both are in double digit ro latest figures 22.06 percent and roc is point five four percent good one one point which is about asset turnover you can see asset turnover is good for the company at nine point three one so basically m higher the asset turnover it means that more and more they are investing into ppe that is property plant and equipment higher revenue will they be able to generate for the company let's move on with the valuation if you're checking the p e the at the lower price band p is coming to 42.99 and at the higher price band it's coming to 45.36 how is it as compared to the industry industry highest pe is at 89.73 average 66.31 and lowest is also 46.79 so if you see their pe is lower than the lowest in the industry average so if i compare their pe with the peers as well here you can see very clearly lowest is of whom is of britannia industries at 46.79 and their p is lower than that so i believe as per the pe valuation metrics is concerned this one does show that yes it is kind of undervalued and seems that there is some margin left for listing gains if i'm talking about the next one which is eps you can see that eps is the lowest as compared to their peers the second largest is also uh somewhere around 9.08 which is marico their eps is 6.37 basic eps if i'm talking about the net worth you can see net worth is 22.06 percent and this is i guess the fourth largest as compared to the peers if i'm going ahead with the nav nav is also 28.86 uh lowest from the second so uh again not a huge one though but i hope you have understood all the various parameters that we have discussed p b that is nothing but price to book value is again at six point eight two at a lower band and seven point one nine at a higher brand uh band but if i'm comparing some other parameters with their peers you can see if i'm talking about revenue from operations adani bulmar is at the third slot if i'm comparing it with itc which is at number one h1 at number two if i'm talking about revenue cagr their revenue chr is highest at eleven point three as compared to nestle brittany actual itc as well and if i'm talking about ebitda cagr they are again at the second position now with 20.7 percent of ebitda cagr the very first risk that we should discuss is the unfavorable local and global weather patterns because of which it can have an adverse impact on the availability of raw material the second one is that if there is a delayed shipment in the imported crude edible oil then of course their manufacturing can get hampered of course increased in transport cost is also one risk which the business is involved with because more and more uh transport costs that will have a higher impact on the production cost as well and in turn their margins can squeeze in further last one is about the regulatory legal and other proceedings against the promoters promoter group group companies we're going to check out uh check that out one by one in detail now the very first one you can see on the screen is about litigations involving their company of course i'm not going to read out all the litigations but you can see there are again two subparts here litigations against the company and litigation by our company here you can see a lot of outstanding cases of course amounts involved are also decent enough you can see here the amounts are also in rupees million so if you want you can pause the screen read through this and then go ahead if you see litigations involving against the directors again you have certain litigations then you see litigations involving their promoters in that you have again two points litigations against their promoters and litigations by their promoters so you can see again two subparts here and the last one that we are going to discuss is about the indirect taxes one again there is there is a litigation and final is litigations again litigations involving their subsidiaries and these are the litigations by their subsidiaries where again you have direct tax and indirect tax so i believe that whenever you are applying for the company of course as we are discussing in this case they are number one in many facets they do have a lot of strengths but we can't just look only at the good points right you also have to understand what are the risks litigations and after understanding financials and all other valuation parameters then take a final call whether you're going to invest in this or not well now that we have understood the risks and litigations in detail now also let's have a quick recap of all their strengths their brand fortune as we discussed has a very strong brand recall value second important strength is that they have a leadership in branded edible oil and packaged food business in india also they are one of the fastest growing food fmcg they also have a very strong parentage if you remember we talked about the mega business behind this jv of adani and wilmar group where wilmer international is the largest palm oil supplier in the world and because of this what happens is that they get an additional competitive edge in enabling mitigation of price risk and if i'm talking about willmar which is the largest edible crude oil importer in india it gives a good bargaining power for better quality of raw materials if i'm talking about the distribution network company is the largest distribution network amongst the branded edible oil companies in india and as per the imrb report the company was present in one out of three households and they were catering to 1.6 million retail outlets moving ahead with ipo details the issue opens on 27th of january closes on 31st of january if you see that the share is going to be listed on bse as well as nsa there's going to be an employee discount for that as well the ipo's listing date is at 8th of february 2022 minimum investment is 14950 and of course ri category highest is one lakh ninety four thousand three fifty if you've read about this company they had originally planned their ipo size at four thousand five hundred crore rupees which they've taken down to three thousand six hundred crore rupees so when i was wondering that why is there a reduction in the ipo size i read that the company felt that there is no need to allocate a huge chunk for the general corporate purpose and that is the reason why they have reduced the size by the way sebi also allows such a reduction of almost up to 20 percent in the ipo size when after the drhp is filed but before the rhps filed so moving ahead what are the objectives of the ipo very important it is not an office it's 100 fresh issue so whatever funding are going to get they are going to utilize it for capital expenditure you can check out the table wherein you will understand how much allocation is for what purpose they're also going to do some repayment and prepayment of the borrowings also want to use it for funding the strategic acquisitions and investments for the company well i hope you have understood about the company in detail but the big question am i going to apply or not for that don't forget to check out the live session on 31st at 11 am and if you also want to know more about how to analyze the ipos you can click here and if you want to know about the ipo hits and misses of 2021 you can click here till then take care and bye bye you
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