Adani Group Increases OFS Size in Wilmar JV

In response to strong demand from institutional investors, the Adani Group has decided to increase the size of its offer for sale (OFS) in Adani Wilmar to 20%, up from the previously announced 13%. This strategic move is aimed at capitalizing on the robust interest shown by investors, facilitating a quicker influx of funds for the group.

The adjustment in the deal's structure not only benefits the Adani Group by expediting the financial inflow but also eases the financial burden on Wilmar, reducing the immediate capital required from them. Upon the deal's completion, Wilmar's stake in the joint venture will rise to 68%, marking a significant shift in the ownership landscape of Adani Wilmar.

Strategic Implications and Future Plans

This stake sale is part of a broader strategy by the Adani Group to divest its 44% holding in Adani Wilmar, aiming to raise approximately $2 billion. The proceeds are earmarked for reinvestment into the group's core infrastructure projects, signaling a strategic pivot towards strengthening its foundational business areas.

Following the consolidation of its stake, Wilmar plans to adopt a business model akin to ITC's, leveraging Adani Wilmar's extensive distribution network and primary edible oil operations to propel the growth of its other FMCG products. This strategic maneuver is expected to redefine the competitive dynamics within the FMCG sector in India.

Market Response and Financial Details

The OFS, which is set to open on January 10 and close on January 13, is anticipated to generate at least Rs 7,150 crore for the Adani Group. The minimum per-share price has been set at Rs 275, reflecting a 15% discount to Adani Wilmar's closing price on BSE on the announcement day. This pricing strategy is designed to attract a wide array of investors, ensuring the success of the stake sale.

Adani Wilmar's FMCG portfolio has demonstrated a robust 24% volume growth year-on-year in the December quarter, underscoring the company's strong market position and the potential for future growth. Despite the evolving market dynamics, the edible oil business continues to dominate the company's revenue streams, accounting for 80% of its total revenues.