Whirlpool of India Sells 24.7% Stake for Rs 4,039 Crore in Block Deal

On Tuesday, Whirlpool of India, a well-known company that sells electronic goods, had an important event happen in the Indian market.

A block deal was made where 24.7% of shares were sold for Rs 4,039 crore ($451 million). Whirlpool Mauritius Ltd, the company that owns the Indian unit, sold 3.2 crore shares in order to lower its debt levels.

The sale of the stake took place at the floor price of Rs 1,230 per share, which represents a 7.6% discount to the previous closing price of the company’s shares.

It is worth noting that the parent company of Whirlpool of India, Whirlpool Corporation, has committed to retaining a majority stake post-sale and views the Indian market as crucial for growth.

The Impact of the deal on the company

The proceeds from the sale will be primarily used for debt repayment, which will help improve the balance sheet flexibility of Whirlpool of India. This move is expected to improve the company’s long-term financial health significantly.

However, the company’s stock price dropped 2.8% in early trade, reflecting market concerns over the impact of the share sale.

It’s worth noting that this move follows Whirlpool Corp.’s announcement in November 2023 to sell up to 24% of its stake in the Indian unit to manage debt.

The company’s share price has declined over 16% in the past six months, in contrast to the Nifty 50 14% gain during the same period.

Conclusion

Overall, this block deal signifies Whirlpool’s strategic shift towards debt reduction while maintaining its commitment to the Indian market. The parent company’s decision to retain a majority stake indicates its continued confidence in the Indian market and its long-term growth potential.

The sale of the stake is expected to help the company improve its financial position and pursue growth opportunities in the future.

This development is significant for the Indian market as well, as it indicates the potential for more such deals in the future.