Adani Enterprises weighs exiting $8 billion venture with Singapore’s Wilmar: Sources
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Shares of Adani Wilmar have fallen about 36 per cent this year, valuing the company at around US$6.2 billion.
PHOTO: REUTERS
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Mumbai - Adani Enterprises is exploring selling its stake in its Mumbai-listed consumer-staple joint venture with Wilmar International,
The conglomerate has been considering a potential sale of its 44 per cent stake in Adani Wilmar for a few months, the people said. Adani’s shares are worth about US$2.7 billion (S$3.6 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 people said. Wilmar, the Singapore-listed food conglomerate co-founded by billionaire Kuok Khoon Hong in 1991, could decide to retain its stake in the business, one of the people said.
Deliberations are at an early stage and Adani Enterprises may decide to keep its stake, the people said. An Adani spokesman said the group will not 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 (S$8.3 billion). Adani-linked companies had lost more than US$150 billion in market value at one point after United States-based short-seller Hindenburg Research levelled fraud allegations against the business empire.
Adani is back to making deals now that the shares have stabilised. Ambuja Cements said on Aug 3 that it will acquire Sanghi Industries at an enterprise value of US$605 million. In July, Bain Capital agreed to buy the 90 per cent stake the family held in Adani Capital and Adani Housing.
Adani Wilmar raised about 36 billion rupees (S$585 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 more than 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 June 30. Management attributed the loss to falling edible oil prices and high-cost inventory. BLOOMBERG
