Adani Wilmar shares drop 5% as Adani mulls stake sale
Gautam Adani is considering selling a stake in Adani Wilmar, which sells Fortune brand of edible oils, shares of the FMCG company fell up to 4.8% on Wednesday morning to the day's low of Rs 374. A possible stake sale of its 44% holding in Adani Wilmar will help Adani Group free up capital for its core businesses, Bloomberg reported last night saying that Wilmar, the Singapore-headquartered food conglomerate co-founded by billionaire Kuok Khoon Hong in 1991, could decide to retain its stake in the business. Read More Both Adani and Wilmar own a 44% stake in Adani Wilmar, whose shares have fallen 37% so far in 2023.
The downside has been largely attributed to scathing allegations around stock manipulation, accounting frauds and corporate governance practices made in the Hindenburg report this January against Adani Group companies. Adani’s share is worth about Rs 22,000 core at the current share price. If the stake sale materialises, Adani may decide to keep a minority stake in the company.
In the June quarter, Adani Wilmar's consolidated revenue dropped 12% year-on-year (YoY) to Rs 12,928 crore due to a steep decline in edible oil prices. Volumes were, however, higher by 25%. The company reported a consolidated loss of Rs 79 crore in the quarter against a Rs 194 crore profit in the corresponding quarter of last year.
During the quarter, margins were impacted by high-cost inventory in a falling edible oil price environment and dis-aligned hedges compared to spot prices of physical commodities. The company said it sees large opportunity in the HoReCa, institutional segment and exports as well and is working on plans to exploit these opportunities. «Distribution expansion, gaining share in under-indexed markets and margin
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