 "Adani Enterprises to sell entire 44% stake worth $2.2 billion in Wilmar")
Adani Enterprises (AEL) announced on Monday that it has entered into an agreement to sell its entire stake of around 44 per cent in FMCG joint venture Adani Wilmar (AWL). The stake sale, which will be executed in two tranches, is expected to generate approximately $2.2 billion, or Rs 18,817 crore, for the Adani group upon completion.
Shares of Adani Wilmar, which makes Fortune brand cooking oil, wheat flour, pulses, rice and sugar, on the BSE closed at Rs 329.5 each, down 0.17 per cent. Established in 1999, Adani Wilmar owns 24 factories in 15 Indian cities.
Currently, the Adani group and Singapore’s agribusiness giant Wilmar International each hold a 43.94 per cent stake, or 571.02 million shares, in AWL, according to the BSE.
“Adani Enterprises (AEL), Adani Commodities (ACL, a wholly-owned subsidiary of AEL) and Lence (a wholly-owned subsidiary of Wilmar International) have entered into an agreement on December 30 2024, pursuant to which Lence will acquire all the paid-up equity shares of Adani Wilmar Ltd held by ACL as on the date of exercise of the call option or put option, as the case maybe, in respect of a maximum of 31.06 per cent of the existing paid-up equity share capital of AWL,” AEL said in a statement. Its shares closed at Rs 2,593.45 apiece on the BSE, up 7.65 per cent, following the announcement.
By selling its stake to Wilmar, Adani Enterprises – the flagship company of the Adani group -- will raise Rs 13,301 crore.
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In addition, it has been agreed that AEL will divest its remaining 13 per cent stake in AWL to comply with the minimum public shareholding requirement of 75 per cent. Once both transactions are completed, AEL will fully exit its 43.94 per cent holding in AWL, which had a market capitalisation of Rs 42,824 crore as on Monday.
By selling the remaining 13 per cent stake, AEL looks to raise over Rs 5,500 crore.
The proceeds from the sale will be used to accelerate investments in Adani Enterprises' core infrastructure platforms, particularly in energy, utilities, transport & logistics, and other adjacent sectors within the primary industry, the company said in its release. “AEL will continue to invest in infrastructure sectors which will further strengthen Adani Enterprises’ position as India’s largest listed incubator of platforms playing the key macro themes underpinning India’s growth story.”
The Adani group, which is present in segments such as renewable energy, coal, airports, defence, aerospace and cement among others, has already committed investments worth billions of dollars in these areas.
The divestment comes a month after US authorities accused founder Gautam Adani and some top executives of being part of a scheme to pay bribes worth $265 million to secure Indian power supply contracts. The Adani group has called the charges "baseless".
In light of the sale, Adani Enterprises’ board of directors has passed a resolution acknowledging the resignation of Adani Commodities’ nominee directors from the board of Adani Wilmar. The parties have also agreed to take steps toward changing the name of Adani Wilmar.
The deal will be funded from internal sources and bank borrowings, Wilmar said in a separate statement, adding that it will explore opportunities to bring in “strategic investors” for the company.
The Indian subcontinent, including Bangladesh, Sri Lanka, and Pakistan, offers "tremendous growth potential" for the agrifood businesses, Wilmar said. "The rural market in India presents significant growth opportunities, and Adani Wilmar is well positioned to capture a substantial market share," it added.
For 2023-24, Adani Wilmar posted a turnover of Rs 51,262 crore and held the largest market share in the edible oil sector. Its flagship brand, Fortune, had annual brand sales exceeding Rs 20,000 crore, according to the company’s annual report.