Parent sells sizeable stake in Whirlpool India

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, DSP  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.

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