Gautam Adani BIG move, to raise USD 17000 crore from sale of stake in…, Pranav Adani to resign from…

This is the first major transaction conducted by Gautam Adani led firm after US federal prosecutors in November filed an indictment against group executives over a USD 265 million bribery.

Billionaire Gautam Adani’s conglomerate announced on Monday its decision to exit the FMCG joint venture Adani Wilmar, marking its first significant move since the US bribery indictment. The group will sell its entire stake in the venture to its Singaporean partner, Wilmar International, and in the open market, in a deal valued at over USD 2 billion.

Adani Enterprises Ltd, which held a 43.94% stake in Adani Wilmar Ltd a producer of Fortune brand cooking oils, wheat flour, and other food products stated that it will divest a 31.06% stake to Wilmar International. The remaining approximately 13% will be sold in the open market to comply with minimum public shareholding norms.

Adani To Sell 40.37 Crore Shares

Adani will sell up to 40.37 crore shares (31.06 per cent stake) to Wilmar at no more than Rs 305 apiece to net Rs 12,314 crore. Adding the share sale through OFS, whose price will be determined on the day of sales, 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.”

Pranav V Adani, director of AEL and nephew of group founder and chairman Gautam Adani, and Malay Mahadevia will resign from the board upon execution of the agreement. The transaction is expected to conclude before March 31, 2025.

Proceeds from the stake sale will be used to turbocharge the growth of AEL in core infrastructure businesses.

With this transaction, Adani is back with a bang, removing the liquidity perception overhang. This is the first major transaction post US federal prosecutors in November filing an indictment against group executives over a USD 265 million bribery scheme to win renewable energy supply contracts. Adani group has denied the allegations as baseless and said it will seek legal recourse.

Adani Enterprises On $2 Billion Deal

“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 December 30, 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 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 the 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”.

The transaction demonstrates Adani’s disciplined approach to finance – at a portfolio level, Adani Group has about 63 per cent equity deployed as a percentage of overall assets. This will increase further as part of this transaction.

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.

(With Inputs From PTI)