Whirlpool of India share price falls 5% on promotor stake sale
Whirlpool of India share price dropped by nearly 5 per cent as its promotor plans to sell a 24 per cent stake worth $451 million through a block deal. The sale will help the company reduce debt and improve its balance sheet.
Whirlpool of India share price declined almost 5 per cent in early trade on Tuesday, February 20, amid reports of its promotor selling a stake through a block deal. Whirlpool share price opened at ₹1,280 against the previous close of ₹1,331.20 and soon fell 4.7 per cent to hit the low of ₹1,268. Around 9:30 am, the stock traded 2.73 per cent lower at ₹1,294.90 on NSE.
Whirlpool of India's promoter, Whirlpool Mauritius Ltd, will sell a 24 per cent stake worth $451 million ( ₹3,745 crore) in the company 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 per cent 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 per cent stake in Whirlpool of India as of 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 a 24 per cent stake, while maintaining majority control in the Indian unit. Post the transaction, the parent will hold around 51 per cent 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 of $451 million ($282 million plus $169 million).
The deal has a 90-day lock-up on the seller if the upsize option is not fully exercised; otherwise, a 12-month lock-up on the seller’s residual stake, as per the terms of the deal.
Whirlpool share price has been lacklustre for the last one year, rising just 3 per cent. The stock hit its 52-week low of ₹1,256.65 on February 23 last year and a 52-week high of ₹1,733 on October 12 last year.
Meanwhile, brokerage firm ICICI Securities maintained an 'add' call on the stock with a target price of ₹1,520 after Q3FY24 earnings.
The brokerage firm pointed out Whirlpool India gained market share in Q3FY24 led by (1) new launches, (2) portfolio premiumisation and (3) additional feet on the street.
The brokerage firm believes that the company’s performance in terms of market share and margins is near its bottom and that there is potential for revival led by aggressive investments.
“It has a market share in double digits across categories with a strong presence in direct cool refrigerators and semi-automatic washing machines,” said the brokerage firm.
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