Adani Shockwave: Mega $2.7 Billion Stake in Adani Wilmar

Adani Enterprises Ltd. has reportedly been mulling over the possibility of divesting its 44 percent ownership stake in Adani Wilmar Ltd., sources with knowledge of the matter have revealed. The confidential nature of the information has led these individuals to request anonymity. At the present stock value, Adani’s shares are estimated to be valued at approximately $2.7 billion, as per calculations by Bloomberg.

Sources familiar with the situation have indicated that the conglomerate is in the initial stages of exploring the option to offload its stake in the consumer-staple joint venture with Wilmar International Ltd., which is listed in Mumbai. The move is aimed at freeing up capital for their core business activities.

While contemplating this potential sale, Indian billionaire Gautam Adani and his family might consider retaining a minority stake in a personal capacity. On the other side, Wilmar, the Singapore-based food conglomerate founded by billionaire Kuok Khoon Hong in 1991, may decide to maintain its stake in the business. However, it is important to note that discussions are still in their preliminary phase, and Adani Enterprises has the prerogative to retain its stake, as stated by the sources. An Adani spokesperson declined to provide any insight into market speculation, while a representative for Wilmar chose not to comment.

Adani Wilmar’s shares have experienced a decline of approximately 36 percent over the course of this year, resulting in a valuation of roughly $6.2 billion for the company. The Adani Group faced a substantial loss in market value—surpassing $150 billion—following allegations of fraud leveled against the business empire by US-based short seller Hindenburg Research. The Adani Group firmly denied any wrongdoing.

In 2022, Adani Wilmar successfully raised around 36 billion rupees ($435 million) through an initial public offering in Mumbai. Both Adani and Wilmar’s combined stakes currently constitute nearly 88 percent of the company’s total shares. Compliance with the Securities and Exchange Board of India’s requirement of maintaining a minimum public shareholding of 25 percent within five years of listing is a consideration for the firm.

Adani Wilmar, a prominent fast-moving consumer goods company, provides a wide array of essential kitchen commodities for Indian consumers, including edible oils, wheat flour, rice, pulses, and sugar. Established in 1999, the company’s products reach over 114 million households through an extensive network of more than 10,000 distributors, according to its annual report. Key competitors in the Indian market include ITC Ltd. and Hindustan Unilever Ltd.

During the quarter ending on June 30, the company reported a net loss of 790 million rupees. Management attributes this loss to the drop in edible oil prices and the presence of high-cost inventory.