Adani, Wilmar likely to start stake sale in joint venture from October

Adani Enterprises Ltd. and Wilmar International Ltd. are expected to start the sale of a minority stake in their consumer joint venture Adani Wilmar Ltd. as early as next month to abide by shareholding regulations, according to people familiar with the matter.
 

The majority owners of Adani Wilmar are planning to sell a roughly 13 per cent interest in the company  — valued at about $736 million based on Monday’s closing price - to comply with Indian securities laws, the people said, asking not to be identified discussing confidential information. Local regulations require at least a 25 per cent shareholding should be with non-founders within three years of listing.

 

Adani Wilmar’s stock climbed 2.1 per cent on the news, and closed 1.4 per cent higher on Monday. The shares have advanced 3 per cent this year, giving the company a market value of $5.7 billion. The broader gauge S&P BSE Sensex has risen almost 15 per cent.

Since the flagship of billionaire Gautam Adani’s conglomerate and Wilmar hold almost 44 per cent each in Adani Wilmar, this 88 per cent overall shareholding needs to be pared down to 75 per cent by February when the three-year grace period ends. 

The stake could be sold in one or two tranches by February and advisers will soon start meeting investors in the US, Southeast Asia as well as India, the people said. Deliberations are ongoing and no final decisions have been made, the people said.

A representative for Adani Enterprises didn’t have any immediate comment when contacted by Bloomberg News, while Wilmar declined to comment.

Jefferies Financial Group Inc., Nuvama Wealth Management Ltd. and SBI Capital Markets are working with Adani Enterprises and Wilmar on their divestment plans, Bloomberg reported on July 18.

The sale will be a barometer of investor appetite for the consumer goods maker that’s just returned to profit. The ports-to-power conglomerate has begun tapping capital markets as it moves past the scathing short seller attack from Hindenburg Research in early 2023. Adani Group has denied the allegations from Hindenburg. Adani Energy Solutions Ltd. raised $1 billion through a share sale last month while Adani Enterprises is considering similar.

Established in 1999, Adani Wilmar has 23 plants in India and sells kitchen staples for Indians, including edible oil, wheat flour, rice, pulses and sugar.