The Adani Group is in discussions with several multinational consumer goods companies to divest its complete 43.97 per cent stake in Adani Wilmar Ltd, reported The Economic Times.
Adani Wilmar is renowned for its ownership of the Fortune brand, which is popular for its edible oils and packaged grocery products. According to executives quoted in the report, a deal is expected to be finalised within a month.
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The conglomerate, which spans various sectors from ports to renewable energy, anticipates a sale price ranging between $2.5 billion to $3 billion for this particular stake in the joint venture with Singapore-based Wilmar International, an entity that also holds an equivalent 43.97 per cent share in Adani Wilmar Ltd.
Adani Wilmar’s share price has witnessed a decline, shifting from Rs 488 in mid-May to Rs 315 as of the most recent trading day. As a result, the company’s market value currently stands at Rs 41,258 crore (approximately $4.96 billion).
One executive quoted in the ET report elaborated on the Adani Group’s strategic objectives, stating that they plan to exit certain businesses to allocate more substantial investments into their core focus areas, primarily centered around infrastructure.
“Adani Group will exit a few businesses to invest more deeply in core focus areas such as infrastructure,” as per the executive. “Plans to disinvest its stake in Adani Wilmar are on these lines,” the executive noted and suggested that proceeds from the proposed sale are likely to be used for investments in other group businesses, and not to pare debt.
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Adani Wilmar is a well-known player in the edible oil sector, boasting a strong presence. In the previous fiscal year, the company reported a net profit of Rs 607 crore alongside revenues amounting to Rs 55,262 crore. However, in the second quarter of FY24, it reported a net loss of Rs 131 crore. The company had posted a loss in the first quarter of the ongoing financial year as well.
The development comes at a time when promoters within the Adani Group have been contemplating the sale of stakes in non-core assets to establish a liquidity cushion, following the valuation dip due to US short seller Hindenburg Research’s scathing report.
While Adani Group had dismissed Hindenburg’s allegation, the short seller’s report had triggered a wealth erosion of approximately $150 billion for investors.
