The Adani Group has again set the process in motion for a potential sale of its fast moving consumer goods business Adani Wilmar and this time it is hoping to get the valuation in the region of $4 billion that it was seeking earlier, sources said.
Last year, the efforts to divest stake in Adani Wilmar, as part of the group’s exercise to exit non-core businesses, came to a halt with expectation mismatch on pricing and valuations between the buyers and seller. The valuation was considerably lower than what the promoters wanted.
There was no response to an email sent to Adani group spokesperson for a comment.
While announcing its results last week, flagship Adani Enterprises announced the demerger of Adani Wilmar in a scheme of arrangement that effectively transfers direct ownership of the FMCG company to the Adani group promoters. Adani Wilmar is a joint venture of Adani Enterprises (through Adani Commodities) and Wilmar International.
A major objective that the demerger has achieved, with the share swap ratio between the shareholders of both companies, is that the promoter stake in Adani Wilmar will drop to 76.76 per cent, close to the maximum 75 per cent stake that regulatory norms stipulate.
The second objective is that it will unlock value for both companies and would pave the way for stake sale or divestment in Adani Wilmar, the sources explained.
In the rationale for the demerger, it was stated that the segregation from Adani Enterprises would enable greater and enhanced focus of the management on the food FMCG business with a focused strategy on growth for enhanced value. It would also provide scope for independent collaboration and expansion.
The scheme of arrangement is subject to regulatory approvals and any proposal or initiatives for a stake sale will take place only after that, the sources said.
Adani Wilmar has an equity valuation of $5.6 billion.
In the first quarter of FY25, the company saw a decent performance, reporting 10 per cent revenue growth with an underlying volume growth of 12 per cent. The foods segment was particularly strong with 19 per cent growth.
In the edibles oils segment it reported 8 per cent revenue expansion with underlying volume growth of 12 per cent, while its market share increased by 60 bps to a fifth. This has to be juxtaposed against Marico’s Saffola edible oil that saw a 1 per cent fall in the quarter.