Whirlpool India Faces Market Shock

In a dramatic turn of events, Whirlpool India's shares plummeted by 20% this Thursday, hitting the lower circuit. This significant drop came after its US-based parent company, Whirlpool Corporation, announced plans to reduce its stake in the Indian entity by more than half, aiming to lower its holding to approximately 20% within this year.

Financial Implications and Strategic Moves

The US giant expects to generate net cash proceeds ranging between $550 to $600 million from this stake sale, with the transaction anticipated to be completed by mid to late 2025. Jim Peters, the chief financial and administrative officer, emphasized that this move is part of their clear capital allocation priorities aimed at maximizing shareholder value and strengthening their balance sheet.

Following the announcement, Whirlpool India's shares concluded at Rs 1,262 each on the BSE. The US firm highlighted that this strategic reduction in stake would grant Whirlpool India increased autonomy to adapt to the changing industry landscape, fostering accelerated growth and enabling further investment in its operations.

Debt Management and Previous Stake Sales

This decision aligns with Whirlpool Corporation's broader strategy to manage its debt, including plans to pay down $700 million in the current year. It's noteworthy that last year, the company sold 24% of its stake in the Indian arm for approximately $468 million, reducing its ownership from 75% to 51%.