Whirlpool Corporation, the American parent has sold 24% stake in its Indian entity, Whirlpool of India.
- Stake has been sold in the open market for a total value of $468 mn.
- Sale happened at Rs 1,277/ per share, a discount of 4.5% to the previous day’s closing price.
- Purpose of the sale has been mentioned to reduce debt at the parent Company level.
- The parent Company’s shareholding in the Indian entity has consequently come down from 75% to 51%.
- Shares has been picked by various fund houses including SBI, Aditya Birla Sun Life, Societe Generale , Nippon India, DSPÂ and ICICI Prudential.
It’s important to note here that Whirlpool’s business and stock price performance has been muted in the last 5 years. Sales grew at a CAGR of 7% during this period, whereas profits have ‘declined’ at a CAGR of 9%. Stock price has remained flat over this period.
Whether the sale is a result of lesser confidence of the parent on the Indian entity’s business prospects (due to the increasing competition) is anybody’s guess.