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The Adani group has decided to put its plans to divest its stake in Adani Wilmar on the backburner for a while as it is not satisfied with the pricing that it is looking for, sources said.
The group has been in talks with leading multinational fast-moving consumer goods companies to sell its nearly 44 per cent stake, but talks have been dragging chiefly due to the expectations on the valuations. Sources suggest that the promoters are aiming for a transaction value close to $4 billion, but the buyers are offering considerably less than this amount.
The group is exploring the option of bringing in a ‘friendly’ financial investor who can pick up a significant chunk of the promoter’s stake in Adani Wilmar.
The company did not respond to an e-mail seeking comments.
In early December, group finance head Jugeshinder Singh had said that a decision on divesting stake or exiting Adani Wilmar would be taken in three months. He said the group had to decide to either scale up the company or deploy the capital elsewhere. The group is focused on the infrastructure sector and is divesting businesses that are not part of that core area. Last year it sold off its non-banking finance company, Adani Capital.
At the current market price of around ₹357 a share, Adani Wilmar has a market capitalisation of $5.6 billion while the equity valuation has been pegged at around $5 billion, according to a couple of brokers.
Edible oils segment
ICICI Securities, which met the company management recently, said the edible oils segment will have strong volume growth in the near term, after a tepid show last year. The company’s Fortune brand has a strong recall in the branded edible oils segment and it is growing faster than other brands. The company is increasing its distribution reach in the rural and southern market with the aim to have 1 million outlets by FY27. It intends to replicate the edible oils success formula in the staple food category. The company is also a leader in the exports of castor and plans to expand capacities. ICICI Securities has maintained its ‘reduce’ rating on the stock, while Nuvama Institutional Equities has a ‘buy’ on the stock.
In December, the company notified the exchanges that promoter entities — Adani Commodities and Lence Pte — would sell up to 1.24 per cent stake in the company as part of the exercise to bring down promoter holding to comply with the minimum public shareholding norm. The divest exercise was to have been conducted between December 26, 2023 and January 31, 2024, but the shareholding pattern as on December-end shows that the promoter holding is still above 87 per cent.
The stock has fallen over 13 per cent over the last six months and appreciated 13 per cent over the last three months.
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