Whirlpool of India Ltd’s promoter, Whirlpool Mauritius Ltd, will sell 24% stake worth $451 million ( ₹3,745 crore) in the Indian appliance maker through a block deal on Tuesday, as per a term sheet reviewed by Mint.
The liquidity from the stake sale will help the American multinational company pare its debt and deleverage its balance sheet.
The block deal will be offered at a floor price of ₹1,230 per share, representing a 7.6% discount from Monday’s closing price of ₹1,331.20 on the NSE.
Goldman Sachs is managing the sale on behalf of the promoter, the term sheet said.
Whirlpool Mauritius Ltd. held a 75% stake in Whirlpool of India as on 31 December 2023, stock exchange filings show.
In November last year, it had stated its intent to take some money off the table by selling 24% stake, while maintaining majority control in the Indian unit. Post the transaction, the parent will hold around 51% stake.
As per deal details, around 19 million shares in the Indian unit will be sold along with a provision to offer an additional 11.4 million shares, for a total $451 million ($282 million plus $169 million).
The deal has a 90-day lock-up on seller if the upsize option is not fully exercised; else, 12 months lock-up on the seller’s residual stake, as per the terms of the deal.
Whirlpool of India, despite a 12% year-on-year (y-o-y) growth in consolidated net profit to ₹29.93 crore for the third quarter ended December 2023, has underperformed the market in terms of returns for investors. The company’s annual return stands at 3.45%, significantly lower than the Nifty 50’s 23.3% return in the same period.
The company’s revenue also increased by 17.9% y-o-y to ₹1,536 crore in Q3 FY24; earnings before interest, tax, depreciation and amortization or EBITDA rose 42.5% y-o-y to ₹63 crore due to strong volume growth, and mix and cost productivity actions, among other things. According to an investment banker who is not part of the deal, the stake sale plans help the parent unlock some value in the Indian unit. “The parent is under debt obligation and the incoming investors see strong growth potential in the Indian market,” he said on condition of anonymity.