Adani Enterprises Limited (AEL) will exit from Adani Wilmar, the FMCG joint venture between its subsidiary Adani Commodities LLP (ACL) and Wilmar International owned Lence Pte (Lence), to focus investments on its core infrastructure business, the firm said in an exchange filing on Monday.
The divestment of its share in Adani Wilmar will raise $2billion for the Adani Group flagship AEL, which it said will be used to “turbocharge its investments in the core infrastructure platforms in energy & utility, transport & logistics and other adjacencies”.
“AEL will continue to invest in infrastructure sectors which will further strengthen AEL’s position as India’s largest listed incubator of platforms playing the key macro themes underpinning India’s growth story,” the statement added.
The exit will take place in two phases. Lence will buy 31.06% stake held by ACL through a call and put option, while Adani Enterprises will divest 13% of its shareholding to ensure compliance with the minimum public shareholding norms.
“The price of shares (is) to be mutually agreed by the parties in writing, provided that such price per share shall not exceed Rs 305,” disclosures filed by Adani Wilmar to the exchanges regarding the sale of ACL’s shareholding in the FMCG JV indicated.
On completion of both these transactions, AEL would have completely exited its shareholding in Adani Wilmar. Adani’s nominee directors – Pranav V Adani and Malay Mahadevia – will step down from the Adani Wilmar board and the company is likely to see a name change, the filing said.
Adani Wilmar stock fell 0.17% on Monday to end the day’s trading at Rs 329.5 per share. Its market cap as on December 30 was Rs 42,824 crore. Adani Enterprises’ stock price was up 7.65% at the end of day’s trading on Monday at Rs 2,593.45 per share.
The firm was set up in 1999 through a joint venture between Adani Group’s ACL and Singapore based Wilmar International’s Lence Pte. It has presence in the FMCG space through products across edible oils, rice grains, soya chunks, pulses, and personal and home cleaning products. It operates brands like Fortune and Kohinoor.
Adani Wilmar clocked Rs 14, 460 crore revenue from sales for the quarter ended September 30, with the lion’s share coming from its edible oils business. Earnings before interest, taxation, depreciation and amortisation (EBITDA) came in at Rs 613 crore while net profit for the quarter was Rs 311 crore.
The company went public in February 2022. As on the date of the announcement, both ACL and Lence held 43.94% in the company before Adani announced its exit.