Adani Wilmar to become subsidiary of Wilmar International after share sale
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Singapore Exchange-listed Wilmar International could own as much as 75 per cent of Adani Wilmar after the share sale.
PHOTO: ST FILE
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SINGAPORE – Indian billionaire Gautam Adani’s Adani Group will sell a 20 per cent stake in Adani Wilmar for 71.48 billion rupees (S$1.1 billion) as it exits non-core activities to focus on the bread-and-butter infrastructure businesses.
The move will see Adani Wilmar, one of India’s largest retailers of cooking oil, rice and pulses, become a subsidiary of Singapore Exchange-listed Wilmar International.
Adani Wilmar, a joint venture between Adani Group and Wilmar International, is listed on the Bombay Stock Exchange and National Stock Exchange of India.
Adani Group, a port-to-power conglomerate that holds a nearly 44 per cent stake in Adani Wilmar, will sell up to 13.5 per cent to the public in a sale offer beginning on Jan 10, with an option to sell an additional 6.5 per cent, making up the 20 per cent.
The sale of Adani Group’s stake in Adani Wilmar will take place over two trading days, starting on Jan 10 for institutional investors and wealthy individuals, and Jan 13 for retail buyers.
The group has set a floor price of 275 rupees a share, a near 15 per cent discount to Adani Wilmar’s Jan 9 closing price of 323.45 rupees on the National Stock Exchange of India.
Adani Wilmar was slated to start a share sale in 2024 to comply with a local securities law that requires at least 25 per cent of the holding to be with public shareholders within three years of listing. The company listed in 2022 and has until February 2025 to meet the rule.
Wilmar International said in a stock exchange filing in December 2024 that it would acquire a maximum stake of 31.06 per cent in Adani Wilmar from Adani Group, at a maximum price of 305 rupees.
The Singapore company could own as much as 75 per cent of Adani Wilmar after the share sale, compared with 44 per cent now, making Adani Wilmar its subsidiary.
The move could potentially help to boost Wilmar International’s net profits in 2025 and 2026, at a time when the Singapore company is expected to see stronger contributions from its soya bean processing business in China after several years of oversupply, said Aletheia Capital analyst Nirgunan Tiruchelvam.
Mr Tiruchelvam upgraded his revenue and earnings forecasts for Wilmar International in a Jan 10 report, citing upside from both the acquisition of Adani Wilmar and the China soya bean business.
He noted that the company, which at current share price levels has a record dividend yield of 5.5 per cent, could generate more buying interest in the weeks ahead.
“It suggests that the controlling shareholder could accumulate the stock, as well as potential interest from income funds,” Mr Tiruchelvam said.
Based on his valuation forecasts, Wilmar International shares could be worth as much as $3.54 in the next 12 months.
Wilmar shares closed down 0.33 per cent at $3.03 on Jan 10 and are around 12 per cent lower over the past 12 months.
Adani Wilmar closed the day at 291.10 rupees, down around 10 per cent.
