Adani Enterprises Ltd. is reportedly considering the sale of its stake in the consumer-staple joint venture with Wilmar International Ltd. The move aims to generate capital for Adani’s core business activities.
Insider sources disclosed that the conglomerate has been investigating the possibility of disinvesting its 44% stake in Adani Wilmar Ltd. for several months now. At present, Adani’s shares are valued at approximately $2.7 billion based on internal sources .
It is suggested that Indian billionaire Gautam Adani and his family might retain a minority stake in a personal capacity after the sale. Wilmar, the Singapore-based food conglomerate co-founded by billionaire Kuok Khoon Hong, could opt to maintain its stake in the venture.
These discussions are in the preliminary stages, and Adani Enterprises could ultimately decide to retain its stake. However, both Adani and Wilmar declined to comment on the market speculation.
Adani Wilmar’s shares have experienced a decline of approximately 36% in the current year, resulting in a valuation of around $6.2 billion for the company. The setback came in the wake of US-based short seller Hindenburg Research’s fraud allegations against the Adani business empire, causing Adani-linked firms to lose over $150 billion in market value at a certain point. The Adani Group vehemently refuted any accusations of misconduct.
In 2022, Adani Wilmar successfully garnered about 36 billion rupees (equivalent to $435 million) through an initial public offering on the Mumbai stock exchange. The combined stakes held by Adani and Wilmar collectively represent almost 88% of the company’s shares. Compliance with the Securities and Exchange Board of India mandates that substantial companies must achieve a minimum public shareholding of at least 25% within five years from their listing date.
Adani Wilmar operates as a “fast moving consumer goods” enterprise, providing essential kitchen commodities to Indian consumers, including edible oils, wheat flour, rice, pulses, and sugar, as detailed on its official website. Since its establishment in 1999, the company’s products have reached over 114 million households through a network of more than 10,000 distributors, as stated in its annual report. It competes within India’s market alongside major players like ITC Ltd. and Hindustan Unilever Ltd.
In the quarter ending on June 30, the company posted a net loss of 790 million rupees. The management attributed this loss to the decline in edible oil prices and the presence of high-cost inventory.
Indian kitchen Staples and Financial Strides : Adani Wilmar’s StoryÂ
Functioning as a notable player in the domain of fast- moving consumer goods, Adani Wilmar offers an array of essential kitchen commodities catering to Indian consumers. These products include edible oils, wheat flour, rice pulses, and sugar, as stated on the official company website. Since its inception in 1999, the company’s products have been distributed to over 114 million households through an extensive network of more than 10,000 distributors, as detailed in its annual report. The competitive landscape in India includes established names such as ITC ltd. and Hindustan Unilever Ltd.
Adani Wilmar: Recent Developments
Last week, Adani Wilmar reported a loss for the first quarter due to a significant drop in edible oil prices.
Adani Group-linked stocks encountered a loss of almost $147 billion in market value earlier this year, prompted by U.S. short-seller Hindenburg Research’s skepticism about the group’s corporate governance.
In May, a panel of the Supreme Court of India stated that it was unable to definitively establish regulatory lapses regarding allegations of price manipulation.
