In a strategic realignment of its portfolio, Indian billionaire Gautam Adani’s Adani Group has announced the sale of a 20% stake in Adani Wilmar for ₹71.48 billion (S$1.1 billion). The move, part of Adani Group’s decision to exit non-core activities, shifts focus to its core infrastructure businesses.
The transaction will see Adani Wilmar, one of India’s largest retailers of cooking oil, rice, and pulses, becoming a subsidiary of Singapore Exchange-listed Wilmar International. The development marks a significant shift in ownership dynamics for the fast-growing joint venture.
Key Details of the Stake Sale
Adani Group, which currently holds a 44% stake in Adani Wilmar, plans to sell up to 13.5% of its stake to institutional investors and wealthy individuals during a two-day sale starting January 10. An additional 6.5% may be sold to retail buyers on January 13.
The floor price for the offer has been set at ₹275 per share, representing a nearly 15% discount to Adani Wilmar’s closing price of ₹323.45 on January 9 on the National Stock Exchange of India.
Adani Wilmar, listed on both the Bombay Stock Exchange and the National Stock Exchange, was initially slated to launch a share sale in 2024 to meet local securities laws mandating a 25% public shareholding within three years of listing. The company, which went public in 2022, has until February 2025 to meet this requirement.
Wilmar International’s Expanding Control
Wilmar International, which currently holds a 44% stake in Adani Wilmar, revealed in a December 2024 filing its intention to acquire up to 31.06% more shares from Adani Group, at a maximum price of ₹305 per share. If fully realized, this acquisition would increase Wilmar’s ownership to 75%, making Adani Wilmar a full subsidiary.
The deal is expected to boost Wilmar International’s profitability in 2025 and 2026. Aletheia Capital analyst Nirgunan Tiruchelvam upgraded revenue and earnings forecasts for Wilmar, citing potential gains from the acquisition and improved performance in its soybean processing business in China, which has struggled with oversupply in recent years.
Market Reactions and Future Outlook
Wilmar International shares dipped 0.33% to S$3.03 on January 10 but could see renewed investor interest. The company’s dividend yield of 5.5%, alongside anticipated revenue growth, has the potential to attract both retail and institutional investors.
Adani Wilmar’s shares also reflected market sentiment, closing down approximately 10% at ₹291.10 on January 10. Analysts believe the restructuring could drive long-term value for Wilmar International, with Tiruchelvam predicting the stock could reach S$3.54 within the next year.
Strategic Implications
The divestment aligns with Adani Group’s broader strategy to streamline operations and concentrate on its core infrastructure projects, spanning ports, power, and renewable energy. Meanwhile, Wilmar International is set to capitalize on the growing demand for edible oils and food products, positioning itself for sustained growth.
As the market watches this high-profile transaction unfold, stakeholders are eager to see how these strategic moves will redefine both companies’ futures.
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