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Adani Group sold its remaining 7% stake in AWL Agri business through a block deal. This has led to the complete exit of the group from the FMCG business. Adani Commodities LLP did this deal. Jefferies managed the block trade. AWL Agri was earlier named Adani Wilmar.
This block deal has been done at the floor price of ₹275.50. Floor price in a block deal is the minimum price below which shares cannot be sold. After this news, AWL Agri shares fell by 3.7% to an intraday low of ₹266.45. However, now it closed at Rs 274.
Adani Commodities LLP is a subsidiary of Adani Enterprises. Whereas Wilmar International is an agri-business company of Singapore. AWL Agri is India’s largest edible oil company, which runs the Fortune brand. This was a joint venture between Adani and Singapore’s Wilmar International.
Adani had a total stake of 44% in AWL Agri Business.
This step of Adani Group is under strategic realignment which is taking its focus back to infrastructure business. Capital will be withdrawn from the FMCG sector and invested in the core business.
- Adani LLP held a total stake of 44% in AWL Agri business.
- Sold 14% stake through OFS in January for Rs 4,856 crore.
- In July, 10.42% stake was sold for Rs 3,732 crore through block deal.
- Sold 13% stake in Wilmar subsidiary for ₹4,646 crore in October.
- In November, the remaining 7% stake was sold in a block deal for Rs 2,400 crore.
- The total amount of AWL Agri Business deal is around Rs 15,700 crore.
- Wilmar International now holds a 57% stake in the AWL Agri business.
AWL Agri’s net profit declined by 21% in September quarter.
AWL Agri’s consolidated net profit declined 21% to ₹244.85 crore in the September quarter. It was ₹311.02 crore in the same quarter last year. But total income increased by 20% to ₹17,525.61 crore, which was earlier ₹14,552.04 crore. Revenue grew, but profit margins remained under pressure. Edible oil and FMCG segments were impacted by competition and increased costs.
Now Wilmar will be able to expand business independently
After the exit of Adani Group, Wilmar International will have full control over AWL Agri. The company can now expand FMCG and food business independently. Investment in infra projects will increase with the cash received by Adani. Market experts say that there will be short term volatility in the stock, but in the long term the growth story of the company remains intact.
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