Whirlpool To Sell 24% Stake In India Business For Curbing Debt; Stock Dives 10%

Whirlpool Corporation has revealed plans to sell up to 24% of its stake in Whirlpool of India, the Indian arm of the global home appliance giant. This decision comes on the heels of the Indian unit reporting a 23.7% dip in second-quarter profits, marking the fifth consecutive quarterly decline. The company attributed the downturn to intensified competition and pricing pressures.

The company has not yet disclosed the exact value of the deal and emphasized that the sale would not impact its full-year forecast. Whirlpool aims to navigate the challenges posed by the Indian market's dynamics while maintaining a majority interest of 75% in Whirlpool of India even after the stake sale.

Nirmal Bang analysts had previously highlighted a concerning trend in customer migration from Whirlpool of India to its competitor LG. The shift was attributed to LG offering a broader range of product options and enhanced features at competitive prices. Whirlpool stated that India continues to be a vital marketplace for growth and a major part of its global expansion strategy.

"The company continues to see India as a significant marketplace for growth and an integral part of the company's growth strategy," assured Whirlpool in a filing on Thursday. The company is determined to expand its operations in the country, which includes upcoming product launches and the integration of the recently acquired Elica India business.

Whirlpool's decision to sell a portion of its stake is seen as a proactive measure to streamline operations, enhance competitiveness, and create room for future investments. The company is optimistic about maintaining a strong foothold in the Indian market, leveraging its extensive experience and brand reputation.

Whirlpool of India's shares concluded the session with a 10% decline, closing at Rs 1,416 per share on Friday. Over the past month, the stock has experienced a 12% drop and has witnessed an 8% decline in the past year. Comparatively, the stock has seen a significant decrease of 35% over the last three years.