Mumbai: Adani Enterprises Ltd (AEL) has signed an agreement with its Singapore-based Joint Venture partner Wilmar International to sell 20% of its stake at Rs.275 per share. The deal, valued at Rs.7,150 crore, is the second divestment after the company sold 13.5% in Adani Wilmar for Rs.4,850 crore in January this year.
Before this divestment, Adani and Wilmar held 44% each in Adani Wilmar, which has been renamed AWL Agri Business recently. Founded in 1999, Adani Wilmar is now India’s largest processor of palm oil, retailing its products under the Fortune brand.
After this transaction, Adani will be left with 11% stake, which it aims to sell soon as the group shifts its focus on its infrastructure, energy and new-age businesses like green hydrogen and data centers.
The Gautam Adani-led conglomerate has been public eye for quite some time now, mainly due to its ambitious, acquisition-fuelled expansion plans and the criticisms that follow it. Environmentalists in Australia have been concerned about Adani’s Australian Carmichael coal mine, while the Hindenberg accusation of stock manipulation resulted in almost $2.43 billion in losses to Adani’s company value in 2023.
Since then, the Adani Group has made a series of high-profile acquisitions, including Ambuja Cements and ACC for $10.5 billion, SB Energy for $3.5 billion and a controlling stake in IANS Media. Additionally, the Adani Group is a frontrunner to acquire the bankrupt Real Estate and Infrastructure firm Jaiprakash Associates in a deal worth $1.51 billion.
After these developments, and the heightened pace of Adani’s inorganic expansion efforts, the company has now become a conglomerate challenging Reliance and Tata Group. The company has funded its acquisitions mostly through debt and the company doesn’t seem to stop anytime soon. All these acquisitions have saddled the company with approximately $34.7 billion in mostly long-term debt, with more than half owed to foreign entities. Many analysts have expressed concern about the company’s over ambitious acquisition spree, with some warning about risks that can affect its standing at a later stage.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers should conduct their own research or consult with a qualified financial advisor before making any investment decisions. The opinions mentioned here are the author’s own.
