The Adani Group has decided to increase the size of its offer for sale (OFS) from 13% to 20% to sell a part of its stake in FMCG company Adani Wilmar. Sources said that this has been done in view of strong demand from institutional investors. This will allow the group to get a part of the money early as the stake sale may take up to a year. After the completion of the deal, the group will completely exit the company, while Singapore’s company Wilmar will have a 68% stake. Adani Group and Wilmar hold 44-44% stake in Adani Wilmar, which owns Fortune Sunflower Oil and Kohinoor Basmati rice brand.
Adani Group to Sell 20% Stake in Adani Wilmar for Rs 7,150 Crore Through OFS
Adani Commodities, one of the promoters of Adani Wilmar, told exchanges that it will sell its 20% stake in the company through the OFS route. With this, the Adani Group is estimated to get at least Rs 7,150 crore. The offer has a floor price of Rs 275 per share, which is 15 per cent lower than Adani Wilmar’s closing price on the BSE on Thursday. The company’s stock closed at Rs 323.95 on Thursday, but today it fell more than 8 per cent to Rs 294.00 in early trade. The Adani Group plans to sell its entire stake in Adani Wilmar for about $2 billion. The group will use the proceeds in its core business.
The company’s name will change
On November 21 last year, two US government agencies indicted Adani Group Chairman Gautam Adani and several other top executives on charges of bribing government officials in India. He said that the group companies had hidden this fact from American investors while selling bonds. The Adani Group has denied the allegations, but the indictment has made it difficult for the group to raise funds. The base offer for Adani Wilmar is for about 17.5 crore shares (13.5% of the company). There is an option to sell an additional 8.4 crore shares (6.5%). This offer will open on January 10 and close on January 13.
After the completion of the deal, the company’s name will be changed to AWL, AWL Agri Business or Fortune Agri Business. Adani Wilmar’s FMCG portfolio registered a year-on-year growth of 24 per cent in the December quarter of this fiscal. Its edible oil business is primarily Fortune’s reach of 2.1 million outlets. Despite the declining share, the edible oil business accounts for 80% of the company’s revenue. In India, the Wilmar Group also holds a 62.5% stake in Shree Renuka Sugars. The term sheet of the OFS shows that five brokers Antique Stock Broking, ICICI Securities, Jefferies India, Nuwama Wealth Management, and SBICAP Securities are managing the offer.
