Adani Exits FMCG: The Adani Group has sold its remaining 7% stake in the AWL agri business through a block deal, marking the group’s complete exit from the FMCG business. Adani Commodities LLP executed the deal.
Jefferies managed the block trade. AWL Agri was previously known as Adani Wilmar.
Block deal details –
This block deal was struck at a floor price of ₹275.50. The floor price is the minimum price below which shares cannot be sold in a block deal.
Effect of share –
Following this news, AWL Agri shares fell 3.7% to an intraday low of ₹266.45. However, they currently closed at ₹274.
About Adani Commodities –
Adani Commodities LLP is a subsidiary of Adani Enterprises. Wilmar International is a Singapore-based agri-business company. AWL Agri is India’s largest edible oil company, operating the Fortune brand.
This was a joint venture between Adani and Singapore’s Wilmar International.
Adani held a 44% stake in the AWL agri business. This move is part of Adani Group’s strategic realignment, shifting its focus back to the infrastructure business. Capital will be withdrawn from the FMCG sector and invested in core businesses.
•Adani LLP held a total 44% stake in AWL Agri Business.
•In January, a 14% stake was sold through an OFS for ₹4,856 crore.
•In July, a 10.42% stake was sold through a block deal for ₹3,732 crore.
•In October, a 13% stake was sold to a subsidiary of Wilmar for ₹4,646 crore.
•In November, the remaining 7% stake was sold in a block deal for ₹2,400 crore.
•The total deal value of the AWL agri business is approximately ₹15,700 crore.
- Wilmar International now holds a 57% stake in the AWL agri business.
AWL Agri’s net profit declined 21% in the September quarter.
AWL Agri’s consolidated net profit declined 21% to ₹244.85 crore in the September quarter, compared to ₹311.02 crore in the same quarter last year. However, total income increased 20% to ₹17,525.61 crore, compared to ₹14,552.04 crore previously.
Revenue growth was achieved, but profit margins remained under pressure, driven by competition and rising costs in the edible oil and FMCG segments.
Wilmar will now be able to expand its business independently.
Following Adani Group’s exit, Wilmar International will have full control of AWL Agri. The company can now independently expand its FMCG and food businesses. Adani’s cash will be used to increase investment in infrastructure projects.
Market experts say that there will be short term volatility in the stock, but the company’s growth story remains intact in the long term.
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