Adani Wilmar, the food and FMCG wing of the Adani Group, is planning to pursue both organic and inorganic growth opportunities post the demerger. It is also looking forward to doubling its revenue from the food and FMCG business over the next three to four years. This will give the Adani Group’s food business excellent growth. The rumours of the Adani scandal will also subside.
Adani Wilmar’s Plans for Expansion:
The CEO and MD of Adani Wilmar, Angshu Mallick, has recently mentioned in an interview that the company is open to organic opportunities within various regional branded staples. It also plans to venture into areas such as spices. By doing so, it will be able to extend its business and bring more products under its portfolio. He has also mentioned that staples and kitchen essentials are where AWL wants to be, and the company is not venturing away from the strategy. Regional brands may not have the power to expand the way national players do. This will give AWL additional opportunities to take up new acquisitions in the upcoming years.
In terms of organic expansion, Adani Wilmar has already planned two capital expenditure programmes. One is INR 2,200 crore, which will be completed at the end of FY25. The second is a capex programme worth INR 1,200 crore. This will be completed by March 2026. These two capex programmes will help Adani Wilmar further expand its capabilities across different business verticals. The company will also be able to increase its turnover in the next few years. This will help the business group recover from the losses incurred during the controversies surrounding the Adani scandal.
The Demerger of Adani Wilmar:
Just a week ago, the flagship company of the Adani Group, Adani Enterprises, mentioned that its board had approved the demerger of its food and FMCG businesses to Adani Wilmar. This move will see the promoter stakes in Adani Wilmar fall to 77% from 88%. This is in line with the SEBI guidelines. The public shareholding will increase from 12% to 23% after this transaction. After the demerger, Adani Wilmar will be able to pursue expansion and collaboration initiatives independently. Currently, there is potential for the sale of stakes in Adani Wilmar. These stakes can be sold to strategic investors, including food companies and private equity. Previously, the Adani Group had to defer its plan to sell stakes in Adani Wilmar because of valuation concerns. However, that will no longer be a problem for the global conglomerate.
The Revenue Earned From The Food Business:
The Adani Group’s food business has always offered the global conglomerate a good profit. The company closed FY24 with INR 51,262 crore. This indicates a growth volume of 10%. The company’s food and FMCG business achieved a topline of around INR 5,000 crore in FY24. This accounts for 17% growth in volume and 10% in value. The edible oil segment achieved a topline of INR 38,788 crore in FY24. This reflects 62% in volume and 76% in value.
In the medium term, the edible oil sector was seen growing at 7 to 8% per year, and the food and FMCG sectors at 30%. The company is also planning on taking on new acquisitions in the upcoming months. These acquisitions can be seen as the easiest and fastest way of entering a new segment and further increasing sales. With that in mind, the company is currently in talks with various other companies in its areas of interest to further increase its profit and bring more services under its control. This will help the company achieve new heights. It will also be able to offer better services to customers.
Conclusion:
Adani Wilmar’s business experienced a severe blow during the Hindenburg crisis. A lot of its ventures experienced huge losses because of the allegations surrounding the Adani scandal. Various new acquisitions also had to come to a halt. The Supreme Court case continued for a year. However, no such proof was found against the Adani Group, which caused the conglomerate’s business to return to its original state of glory. It once again started to operate with full force. Its business also witnessed extraordinary growth. The demerger of AWL is seen as a strategic move towards boosting its expansion journey. It will once again lead the conglomerate towards enormous business prosperity.
