Adani Group and Wilmar International are reportedly in talks with several private equity firms to sell part of their stake in the consumer-staple joint venture, Adani Wilmar. Both partners, owning 44% each in the venture, have offered a majority stake to potential buyers. This move marks one of the largest transactions in the FMCG industry, with Adani Wilmar’s market valuation standing at Rs 51,513 crore as of Wednesday.
While the Adani Group and Wilmar International declined to comment on the matter, the proposed sale comes amid the company’s market valuation drop from its peak of Rs 81,268 crore in January. This decline followed an ‘unsubstantiated’ report by US short seller Hindenburg Research, accusing the Adani Group of stock manipulation and accounting fraud—a claim the Adani Group has vehemently denied.
Despite the setback, Adani Group stocks have recovered a significant portion of the losses. The joint team of Adani and Wilmar has approached private equity firms for a potential stake sale, with a focus on attracting realistic valuations. PEs, armed with billions of dollars in capital for investment, are particularly interested in sectors like healthcare, consumer retail, and technology.
Adani Wilmar, fitting the bill as a consumer product company, could see the Adani Group retaining a small stake. Jugeshinder Singh, Adani Group’s Chief Financial Officer, mentioned in a recent event that the group is evaluating whether to keep or divest the Wilmar stake. The proceeds from the sale are earmarked for investment in a series of infrastructure and renewable power projects across the country.
The Adani Group envisions a total investment of $75 billion in energy transition initiatives, aiming to achieve a 45GW renewable energy capacity by 2030. Adani Wilmar itself has shown promise, delivering double-digit volume growth in the packaged staple foods sector and strong execution in the quarter ending September 30.
Notably, the company’s edible oil segment volumes grew around 5% YoY in Q2FY24, with branded business volumes expanding at a faster rate of 12%. The food & FMCG segment witnessed over 40% YoY growth in revenue from branded products over the last eight quarters, contributing around 80% to the overall segment revenue. The move to sell a stake in Adani Wilmar reflects the Adani Group’s strategic realignment as it aims to channel resources into ambitious energy transition initiatives and infrastructure projects.
