Adani Enterprises Ltd (AEL) has agreed to sell its entire stake in Singapore’s Wilmar group joint venture, raising over $2 billion to invest in core businesses such as energy and utilities. The sale will see AEL exit its 26-year partnership with the Wilmar group.
According to Adani Enterprises, the proceeds from the sale will be used to turbocharge investments in infrastructure platforms in key sectors including energy and transport. This move aims to strengthen AEL’s position as India’s largest listed incubator of platforms playing a significant role in underpinning India’s growth story.
The stake sale is also seen as a strategic move to improve the Adani Group’s liquidity position and ability to service upcoming debt obligations. The group currently has a net debt-to-Ebitda ratio of about 2.4x across its portfolio companies.
As part of the exit, Adani Wilmar will change its name, with Pranav Adani and Malay Mahadevia, Adani Group’s nominee directors, resigning from the board. The stake sale values Adani’s stake in Adani Wilmar at ₹18,817 crore ($2.2 billion), representing a significant amount of money for the company.
The Adani group’s exit from the fast-moving consumer goods (FMCG) sector has been speculated over long, following short-seller Hindenburg Research’s allegations that sparked a rout in Adani Wilmar shares. However, Deven Choksey, managing director of DRChoksey FinServ Pvt. Ltd., has stated that the consumer goods business is not aligned with the Adani Group’s focus on large upfront investments and significant cashflows.
With the stake sale complete, the Adani group will retain consumer-facing businesses like airports, Adani Digital, and electricity distribution. The move comes as the company looks to diversify its portfolio and strengthen its presence in key sectors.
Source: https://www.livemint.com/market/stock-market-news/adani-enterprises-to-fully-exit-adani-wilmar-jv-check-details-here-11735552463803.html