Adani Enterprises weighs exiting US$6 billion Wilmar venture
ADANI Enterprises is exploring selling its stake in its Mumbai-listed consumer-staple joint venture with Wilmar International, freeing up capital for their core business, according to people familiar with the matter.
The conglomerate has been considering a potential sale of its 44 per cent stake in Adani Wilmar for a few months, the sources said, asking not to be identified as the information is confidential. Adani’s shares are worth about US$2.7 billion at the current share price, according to Bloomberg calculations.
Indian billionaire Gautam Adani and his family may retain a minority stake in a personal capacity following a sale, the sources said. Wilmar, the Singapore-headquartered food conglomerate co-founded by billionaire Kuok Khoon Hong in 1991, could decide to retain its stake in the business, one of the sources said.
Deliberations are at an early stage and Adani Enterprises may decide to keep its stake, the sources said. An Adani spokesperson said the group won’t comment on market speculation. A representative for Wilmar declined to comment.
Shares of Adani Wilmar have fallen about 36 per cent this year, valuing the company at around US$6.2 billion. Adani-linked companies had lost more than US$150 billion in market value at one point after US-based short seller Hindenburg Research levelled fraud allegations against the business empire. The Adani Group denied any wrongdoing.
Adani Wilmar raised about 36 billion rupees (S$586 million) in an initial public offering in Mumbai in 2022. Adani and Wilmar’s stakes together account for nearly 88 per cent of the company’s shares. The Securities and Exchange Board of India requires that large firms must have a minimum public shareholding of at least 25 per cent within five years of the date of the listing.
Adani Wilmar is a so-called fast moving consumer goods company, offering many essential kitchen commodities for Indian consumers including edible oils, wheat flour, rice, pulses and sugar, according to its website. Incorporated in 1999, the company’s products reach over 114 million households through more than 10,000 distributors, according to its annual report. It competes in India with the likes of ITC and Hindustan Unilever.
The company reported a net loss of 790 million rupees in the quarter ending Jun 30. Management attributed the loss to falling edible oil prices and high-cost inventory. BLOOMBERG
Share with us your feedback on BT's products and services
