Adani Group may sell its entire stake in Adani Wilmar

Following the divergent trends in physical and future prices of edible oil business leading to a loss in Q2, 2023, Adani Group is considering selling its entire stake in Adani Wilmar Ltd, The Economic Times reported on Monday. Indian billionaire Gautam Adani-led group holds a 43.97% stake in Adani Wilmar, which sells a range of edible oils and food products under the Fortune brand. 

Edible Oil and Food Company, a joint venture between Adani Group and Singapore-based Wilmar International, was incorporated in 1999. Wilmar owns a 43.87% stake in the joint venture.  

On 1 November, Edible Oil Major announced their Q2 report wherein the company reported a consolidated net loss of ₹130.97 core ($15.7 million) in the July-September quarter, as profitability in the cooking oil business was impacted. Adani Wilmar posted a ₹48.67 crore ($5.8 million) profit in the July-September quarter a year ago.  

ET reported that Adani Group is in talks with multinational consumer goods companies to exit the joint venture, and the said deal is expected to close within a month, executives familiar with this deal told the newspaper.  

Earlier media reports mentioned that the Adani conglomerate plans to sell its stake in Adani Wilmar. Following this, Adani Enterprises said in their exchange filings that there was no such event concerning the media report that required any disclosure. 

In the July-September quarter this year, the edible oil business contributed 58% to the total volume, while cooking oil accounted for 74% of the total revenue of ₹12,267 crore ($1.47 billion) from the entire operations. 

“Profitability was adversely impacted due to loss in edible oil segment that was partially offset by better margins in the Food and FMCG and industry segments,” Adani Wilmar mentioned in their release. The edible oil losses were driven by divergent trends in the spot (physical) and future prices, resulting in hedging losses, said the release.