Adani to sell stake in food venture Adani Wilmar, raise over $2 bn

Billionaire Gautam Adani's conglomerate on Monday announced its exit from FMCG joint venture Adani Wilmar by selling its entire stake to the Singaporean partner and some in the open market for an estimated over USD 2 billion, in its first major deal since the group's indictment in the US for bribery.

In a statement, Adani Enterprises Ltd — which held 43.94 per cent stake in Fortune brand cooking oil, wheat flour and other products from maker Adani Wilmar Ltd — said it will sell 31.06 per cent stake to Wilmar International. About 13 per cent will be sold in the open market to meet minimum public shareholding requirements.

Adani will sell 31.06 per cent to Wilmar for Rs 12,314 crore (share price of no more than Rs 305 apiece). Adding the share sale through OFS, the total proceeds will exceed USD 2 billion (about Rs 17,100 crore).

"With this, AEL (Adani Enterprises Limited) will fully exit Adani Wilmar Ltd," it said. "Adani's nominee directors will step down from the board of Adani Wilmar Ltd."

The transaction is expected to conclude before 31 March 2025. Proceeds from the stake sale will be used to turbocharge the growth of AEL in core infrastructure businesses.

With this transaction, Adani appears to have removed the liquidity perception overhang. This is the first major transaction following US federal prosecutors in November charge-sheeting founder chairman Gautam Adani and his associates over a USD 265 million bribery scheme to win renewable energy supply contracts. The Adani Group has denied the allegations as baseless and said it will seek legal recourse.

"Adani Enterprises Ltd, Adani Commodities LLP (a wholly-owned subsidiary of AEL) and Lence Pte Ltd (a wholly-owned subsidiary of Wilmar International Ltd) have entered into an agreement on 30 December, 2024, pursuant to which Lence will acquire all the paid-up equity shares of Adani Wilmar Ltd held by Adani Commodities as at the date of exercise of the call option or put option, as the case maybe, in respect of a maximum of 31.06 per cent of the existing paid up equity share capital of AWL," the statement said.

In addition, "it has been agreed between the parties that AEL will divest a 13 per cent share in Adani Wilmar to achieve compliance with minimum public shareholding requirements," it said without giving details.

Adani Wilmar Ltd is an equal joint venture between the Adani Group and Singapore-based commodity trader Wilmar. The two partners currently own a combined 87.87 per cent of Adani Wilmar, far above the maximum permissible 75 per cent. Market regulator SEBI rules mandate that large firms must have at least 25 per cent of shares available to the public within three years from listing.

Established in 1999, Adani Wilmar makes Fortune brand cooking oil, wheat flour, pulses, rice and sugar. It owns 23 plants across 10 states.

"It may be noted that with completion of these two legs, AEL would completely exit its near 44 per cent holding in Adani Wilmar," the statement said. "As of Friday, December 27, 2024, Adani Wilmar had a market capitalisation of Rs 42,785 crore (USD 5.0 billion)."

AEL, in a statement, said it will use "the proceeds from the sale to turbocharge its investments in the core infrastructure platforms in energy and utility, transport and logistics and other adjacencies in the primary industry".

It will continue to invest in infrastructure sectors, aimed to further strengthen its position as India's largest listed incubator of platforms, playing the key macro themes underpinning India's growth story.

The funds from the stake sale will strengthen the incubation capacity of AEL, and further sharpen the focus on consumer services under airports and Adani Digital.

At a portfolio level, the Adani Group has about 63 per cent equity deployed as a percentage of overall assets. This will increase further as part of this transaction.

Consistent with this, AEL raised USD 500 million in October. Other group companies also raised money in recent months — USD 1 billion by Adani Energy Solutions Ltd, USD 500 million by Ambuja Cement, and USD 444 million by Adani Green Energy Ltd.

Adani Wilmar is an equal joint venture between Adani Enterprises and Wilmar Group, both holding 43.94 per cent stake each as of September 30, 2024.

The FMCG firm posted a consolidated total income of Rs 51,555.24 crore during the last fiscal. Its market capitalisation on Monday stood at nearly Rs 42,000 crore (around USD 5 billion).

Adani Wilmar was listed on stock exchanges in February 2022 after raising Rs 3,600 crore through an initial share sale, and was established in January 1999 as a joint venture.