Adani Group Completes $2 Billion Exit from Consumer Goods Venture Adani Wilmar

The Adani Group, led by billionaire Gautam Adani, has announced its decision to exit the FMCG joint venture, Adani Wilmar. The group will sell its entire stake to its Singaporean partner and through the open market, generating over USD 2 billion. This marks the first significant deal since a US bribery indictment. Adani Enterprises Ltd, which owns 43.94% of Adani Wilmar, will sell 31.06% to Wilmar International and the rest in the open market.

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The sale involves up to 40.37 crore shares at a maximum price of Rs 305 each, amounting to Rs 12,314 crore. Including the open market sale, total proceeds will exceed USD 2 billion, approximately Rs 17,100 crore. This transaction will result in Adani Enterprises Ltd completely exiting Adani Wilmar Ltd. The nominee directors from Adani will resign from the board following this agreement.

Adani Group's Strategic Move

Pranav V Adani and Malay Mahadevia will step down from their board positions once the deal is finalised. The transaction is expected to be completed by March 31, 2025. The funds from this stake sale will be used to boost AEL's growth in core infrastructure sectors. This move aims to dispel liquidity concerns surrounding the group after allegations of a USD 265 million bribery scheme.

The group has denied these allegations and plans to pursue legal action. An agreement was reached on December 30, 2024, between Adani Enterprises Ltd, its subsidiary Adani Commodities LLP, and Lence Pte Ltd of Wilmar International Ltd. Lence will acquire all equity shares held by Adani Commodities in Adani Wilmar Ltd under specific conditions.

Compliance with Regulatory Requirements

Additionally, AEL will divest a 13% share in Adani Wilmar to meet public shareholding norms without disclosing further details. Currently, Adani Group and Wilmar jointly own 87.87% of Adani Wilmar, exceeding the permissible limit of 75%. According to SEBI rules, large firms must ensure at least 25% of shares are publicly available within three years of listing.

Adani Wilmar was established in 1999 as a joint venture between Adani Group and Singapore-based Wilmar Group. It produces Fortune brand cooking oil and other food products across its 23 plants in India. With this transaction's completion, AEL will fully exit its nearly 44% holding in Adani Wilmar.

As of December 27, 2024, Adani Wilmar's market capitalisation was Rs 42,785 crore (USD 5 billion). AEL plans to use proceeds from this sale to enhance investments in energy and utility infrastructure and other related sectors. This strategy aligns with AEL's role as India's largest listed incubator for infrastructure platforms.

Financial Strategy and Future Plans

The funds will also bolster consumer services under airports and Adani Digital divisions. This transaction highlights Adani's disciplined financial approach; currently, about 63% of the group's assets are equity-funded. This percentage is expected to rise following this deal.

In October, AEL raised USD 500 million as part of its financial strategy. Other group companies have also secured funds recently: 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 became publicly listed in February 2022 after raising Rs 3,600 crore through an initial public offering (IPO). In India, Wilmar Sugar and Energy Pte Ltd holds a significant stake in Shree Renuka Sugars Ltd., one of the country's leading sugar producers.

This strategic exit from Adani Wilmar allows the group to focus on strengthening its core infrastructure businesses while complying with regulatory requirements for public shareholding.