Billionaire Gautam Adani's group on Monday announced its exit from FMCG joint venture Adani Wilmar by selling its entire stake to the Singaporean partner and in the open market for an estimated over USD 2 billion in a first major deal since the US bribery indictment.
In a statement, Adani Enterprises Ltd -- which held 43.94 per cent stake in Fortune brand cooking oil, wheat flour and other food product maker Adani Wilmar Ltd -- said it would sell 31.06 per cent stake to Wilmar International. Around 13 per cent will be sold in the open market for meeting minimum public shareholding requirements.
Adani will sell a 31.06 per cent stake to Wilmar for Rs 12,314 crore (share price of no more than Rs 305 apiece). Adding the share sale through OFS, the total proceeds will exceed USD 2 billion (about Rs 17,100 crore).
"With this, AEL (Adani Enterprises Limited) will completely step out of Adani Wilmar Ltd," it added. "Adani's nominee directors will resign from the board of Adani Wilmar Ltd." The deal will be closed before 31 March 2025.
Proceeds from this stake sale will be harnessed to turbo-charge growth in core infrastructure businesses at AEL.
With this deal, Adani is back with a bang, removing the liquidity perception overhang. This is the first major transaction post US federal prosecutors in November charge-sheeted founder chairman Gautam Adani and his associates over a USD 265 million bribery scheme to win renewable energy supply contracts. The Adani group has called the allegations baseless and said it will seek legal recourse.
"Adani Enterprises Ltd, Adani Commodities LLP (a wholly-owned subsidiary of AEL) and Lence Pte Ltd (a wholly-owned subsidiary of Wilmar International Ltd) have agreed on 30 December 2024, as per which Lence will purchase all the paid-up equity shares of Adani Wilmar Ltd. Held by Adani Commodities as on the date of exercise of the call option or put option, as the case may be, for up to 31.06% of the total existing paid up equity share capital of AWL", the statement said.
Besides, "it has been agreed between the parties that AEL will divest a 13 per cent share in Adani Wilmar to achieve compliance with minimum public shareholding requirements," it said without giving details.
Adani Wilmar Ltd is an equal joint venture between Adani Group and Singapore-based commodity trader Wilmar. The two partners currently own a combined 87.87 per cent of Adani Wilmar, far above the maximum permissible 75 per cent.
Market regulator Sebi rules mandate that large firms must have at least 25 per cent of shares available to the public within three years from listing.
Adani Wilmar was established in 1999 and manufactures Fortune brand cooking oil, wheat flour, pulses, rice and sugar. It has 23 plants across 10 states.
"It may be noted that with completion of these two legs, AEL would completely exit its near 44 per cent holding in Adani Wilmar," the statement said. As of Friday, December 27, 2024, Adani Wilmar had a market capitalization of Rs 42,785 crore or USD 5.0 billion. AEL said in its statement it would use the "proceeds from the sale to turbocharge its investments in the core infrastructure platforms in energy and utility, transport and logistics, and other adjacencies in the primary industry".
It will continue to be aggressive in infrastructure sectors, further strengthening its position as India's largest listed incubator of platforms, playing the key macro themes underpinning India's growth story.
The proceeds from the sale of a stake will help to sharpen the focus on consumer services under airports and Adani Digital while bolstering AEL's incubation capacity.
The transaction demonstrates Adani's disciplined approach to finance - at a portfolio level, Adani Group has about 63 per cent equity deployed as a percentage of overall assets. This will increase further as part of this transaction.
Consistent with this, AEL raised USD 500 million in October. Other group companies also raised money in recent months - USD 1 billion by Adani Energy Solutions Ltd, USD 500 million by Ambuja Cement, and USD 444 million by Adani Green Energy Ltd.
Adani Wilmar is an equal joint venture between Adani Enterprises and Wilmar Group, both holding 43.94 per cent stake each as of September 30, 2024.
The FMCG firm posted a consolidated total income of Rs 51,555.24 crore during the last fiscal. Its market capitalisation on Monday stood at nearly Rs 42,000 crore (around USD 5 billion).
Adani Wilmar got listed on stock exchanges in February 2022 after raising Rs 3,600 crore through an initial share sale.
Adani Wilmar Limited (AWL) was established in January 1999 as a joint venture.
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