Adani Is In Talks with Wilmar to Exit JV

By Consultants Review Team Monday, 06 November 2023

Adani Group is allegedly in talks with several international consumer goods corporations about selling its full 43.97 percent interest in Adani Wilmar. The agreement is likely to be completed within a month.

Shares of Adani Wilmar Ltd will be under scrutiny on Monday morning following a media report citing executives familiar with the matter that suggested the Adani Group was in talks with multiple multinational consumer goods companies to offload its entire 43.97% stake in Adani Wilmar Ltd.

Adani Wilmar recently reported a consolidated net loss of Rs 131 crore for the September quarter, which was hampered by losses in the edible oil segment. This compares to a profit of Rs 49 crore in the previous quarter. The Adani group firm's revenue had also declined 13% year on year (YoY) to Rs 12,267 crore for the quarter, compared to Rs 14,150 crore in the same quarter the previous year.

According to The Economic Times, the company, led by Chairman Gautam Adani, expects to pay $2.5-3 billion for the joint venture interest. Adani Wilmar is a joint venture between the firm and Singapore-based Wilmar International which owns the popular Fortune brand of edible oils. Wilmar also has a 43.87 percent stake in the company. In January 1999, the JV was formed. The group and Adani Wilmar have yet to respond to the findings.

According to a source, the group intends to leave a few businesses to spend heavily in core priority areas such as infrastructure. Disinvestment in Adani Wilmar is one of the plans. The proceeds are intended to be used for additional investments rather than debt reduction.

Reports have circulated that the group is abandoning non-core assets to generate a liquidity cushion for the past few months. This came after the Hindenburg Research study resulted in a $150 billion loss of value for investors.

Adani Wilmar also provides other kitchen goods such as wheat flour, rice, legumes, and sugar apart from the Fortune brand. According to its website, it is one of the fastest-growing packaged food firms in the country. It is India's largest producer of lauric fat and the greatest producer of castor oil. Adani Wilmar is also the world's largest producer and exporter of castor oil and its derivatives. In India, the firm operates 23 facilities in ten different states.


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