Why Billionaire Gautam Adani Is Planning To Exit Adani Wilmar 18 Months After Its IPO

by The Technical Blogs

Gautam Adani-led Adani group’s flagship firm Adani Enterprises is exploring selling its stake and exiting Adani Wilmar, which is its FMCG joint venture with Wilmar International. This will help free up capital for their core business, according to people familiar with the matter.

Adani Wilmar Shares Bleed Amid Adani's Stake Sale

Adani Wilmar Shares Bleed Amid Adani’s Stake Sale

The shares of Adani Wilmar, which was the top-performing IPO last year, have been bleeding today amidst the stake sale news, being more than 4% down in the morning.

Adani Enterprises has been considering a potential sale of its 44% stake in Adani Wilmar for a few months, the people said. Gautam Adani’s shares are worth about $2.6 billion at the current share price, according to Bloomberg calculations.

Gautam Adani and his family may retain a minority stake in a personal capacity following a sale. On the other hand, Wilmar, the Singapore-headquartered food conglomerate, could decide to retain its stake in the business.

How Adani Wilmar’s Stock Has Been Performing

After a mega IPO which was followed by a great run for many months, Adani Wilmar’s stock has fallen about 38% this year to date, valuing the company at around $6 billion. Since the beginning of this year, Adani-linked companies had lost more than $150 billion in market value at one point after Hindenburg research’s report rattled the Adani group.

But now, about seven months since that bloodbath began, Adani is back to making deals now that the shares have stabilized. Ambuja Cements had said earlier this month that it will acquire rival Sanghi Industries at an enterprise value of $605 million. Last month, Bain Capital agreed to buy the 90% stake the family held in Adani Capital and Adani Housing, as per Bloomberg.

Adani Wilmar raised about Rs 36 billion ($435 million) through IPO in 2022. Adani and Wilmar’s stakes together account for nearly 88% of the company’s shares. The company reported a net loss of Rs 790 million in the quarter ending June 30th 2023. It attributed the loss to falling edible oil prices and high-cost inventory.

Adani Group

Now it remains to be seen whether Gautam Adani entirely sells his stake in Adani Wilmar or ends up retaining some of it.

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