Adani Group to raise $833 million as it exits joint venture with Wilmar

The Adani Group will raise INR 71.48 billion ($833 million) by selling up to 20 per cent stake in Mumbai-listed Adani Wilmar Ltd. as it exits non-core activities to focus on the bread-and-butter infrastructure businesses.

The shares will be divested through a so-called offer-for-sale window of the stock exchanges at a floor price of INR 275 rupees apiece, the company said in a stock exchange filing Thursday.

Adani Commodities LLP, one of the founders of the company, will sell 175.45 million shares or a 13.5 per cent stake, with a greenshoe option to offer another 84.5 million shares or 6.5 per cent, the filing said.

The issue was fully subscribed on Friday — the first day of the share sale reserved for institutional investors and wealthy individuals – getting 111 per cent bids at 4.15 pm in Mumbai, according to exchange data. It continues on January 13 for retail buyers.
Adani Wilmar shares slumped 10 per cent — the most since November — to close at 291.10 rupees, pushing the past year’s decline to 21 per cent.

This is the first phase of the port-to-power conglomerate’s exit from the joint venture in which it holds 44 per cent. In the second phase, Singapore’s Wilmar International Ltd. has agreed to acquire the residual stake at a price not exceeding 305 rupees.

After the transactions, the Gautam Adani-led conglomerate will fully exit the firm and use the proceeds to bolster its core infrastructure ventures that include airports and renewable energy.

The stake sale is happening amid legal challenges faced by Adani in the US, where federal prosecutors have alleged that the Indian billionaire was part of a bribery scheme to win solar energy contracts in India. Rating agencies cited that as a potential risk to fund raising for the group, and placed multiple Adani firms on negative watch.
Adani Wilmar was slated to start a share sale last year to comply with a local securities law that requires at least 25 per cent of the holding to be with public shareholders within three years of listing.

The company listed in 2022 and has until February to meet the rule. Bloomberg reported in August 2023 that Adani Enterprises was exploring selling a stake sale in its consumer-staple joint venture for freeing up capital for core business.