Eureka Forbes promoter to sell 12% stake for $138.6 million

Advent International had bought a majority stake in Eureka Forbes from Shapoorji Pallonji Group for  ₹4,400 crore in 2021.
Advent International had bought a majority stake in Eureka Forbes from Shapoorji Pallonji Group for 4,400 crore in 2021.

Summary

Lunolux, an entity held by American buyout firm Advent International, will sell part of its stake in the household appliances maker at a time when Eureka Forbes has underperformed the market

MUMBAI : Lunolux Ltd, the promoter of Eureka Forbes Ltd, will sell up to a 12% stake in the household appliances maker for $138.6 million ( 1,148.7crore) through a block deal on Thursday, people with knowledge of the deal said.

Advent International had bought a majority stake in Eureka Forbes from Shapoorji Pallonji Group for 4,400 crore in 2021. Lunolux is an entity held by Advent International. As on December 2023, it held around 72.56% stake in the company.

The block deal will be offered at a floor price of 494.75 per share, a 3% discount from Wednesday’s closing price of 510.05 on BSE, the deal term sheet reviewed by Mint shows. IIFL Securities is managing the sale on behalf of the promoter.

Lunolux held a 72.56% stake in Eureka Forbes as of 31 December. Around 19.34 million shares in the Indian unit will be sold, with an option to sell an additional 23.21 million shares.

The deal comes even as Eureka Forbes has underperformed the market, with its annual return at 6.17% compared to the Sensex's 19.7% return in the same period. However, the company reported a 13.9% year-on-year increase in revenue to 539.4 crore and a 233.86% increase in profit to 22.97 crore.

The deal has a 90-day lock-up on the 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.

For Advent, this is deleveraging its position and taking some money off the table from its three-year-old bet in India’s bulging consumer segment. It is also looking to sell stakes in Bharat Serum Vaccines and Manjushree Technopack.

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