News

Published: December 26, 2023
Updated: December 26, 2023

Adani Wilmar Promoters Eye Stake Sale to Meet Public Shareholding Norms

Adani Wilmar Ltd is set to make headlines as its promoters, Lence Pte Ltd and Adani Commodities LLP, express their intent to divest part of their stake in the FMCG company. This move is aimed at ensuring compliance with the minimum public shareholding norms. As of September 30, the promoters collectively held a substantial 87.94% stake in Adani Wilmar, with both Lence Pte Ltd and Adani Commodities LLP owning 43.97% each.

Stake Sale Details and Timeline:

In a filing with the stock exchange, Adani Wilmar revealed that the two promoter entities plan to sell up to 1.24% of the total paid-up equity share capital, translating to 1,61,16,014 equity shares. The sale is scheduled to take place between December 26, 2023, and January 31, 2024, or until the completion of the sale, whichever comes earlier. The company may conduct the sale in one or more tranches.

Market Impact and Investor Assurance:

To ensure adherence to minimum shareholding requirements, Adani Wilmar stated that Lenee Pte. Ltd, one of the promoter entities, commits not to buy any shares in the open market during the specified sale dates. This strategic move aims to provide investor assurance and facilitate the company's compliance with regulatory norms.

Stock Performance and Future Outlook:

Adani Wilmar's shares have seen a notable 4.7% increase in the last month. However, the stock reflects a year-to-date decline of 39.6%. Despite this, the company reported an 18% year-on-year volume growth in H1FY24 and an 11% year-on-year growth in the September quarter. Factors contributing to this growth include improved consumer demand, lower edible oil prices, efficient supply chain management, and successful execution in the go-to-market strategy.

Revenue Challenges and Operational Resilience:

While the company experienced a 13% year-on-year decline in revenues for the first half of the financial year, attributed to a significant correction in edible oil prices, Adani Wilmar showcased resilience. Challenges such as restrictions on basmati and non-basmati rice exports persisted, impacting overall revenues.

In light of the proposed stake sale and the company's operational resilience, Adani Wilmar navigates both market dynamics and regulatory compliance. The strategic divestment by promoters reflects a proactive approach to align with public shareholding norms, paving the way for potential market adjustments and investor confidence.