Adani Wilmar slashes IPO size to Rs 3,600 crore from earlier planned Rs 4,500 crore

Edible oil company Adani Wilmar (AWL) cut the size of its initial public offer (IPO) to Rs 3,600 crore from Rs 4,500 crore planned earlier, people familiar with the development said on Friday. 

The company, which sells cooking oil under the Fortune brand, was expected to float its IPO this month, they added. 

AWL is a 50:50 joint venture company between Ahmedabad-based Adani Group and Singapore’s Wilmar Group. 

Now, the IPO will comprise a fresh issue of equity shares worth Rs 3,600 crore. There will not be any secondary offer. 

According to the Draft Red Herring Prospectus, the company was aiming to raise Rs 4,500 crore from the market by issuing fresh shares. 

The company has only reduced the portion of general corporate purposes and not reduced the core objects of the issue. 

Of the IPO proceeds, Rs 1,900 crore will be used for capital expenditure, Rs 1,100 crore will be set aside for repayment of debt and Rs 500 crore in funding strategic acquisitions and investments. 

When contacted to confirm the development, the company’s spokesperson declined to comment. 

The move to cut the IPO size is perceived to be a good move by investors as the issue size optimisation will help the company have better return on capital employed (RoCE) and return on equity (RoE). 

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