Whirpool of India shares slide 4% amid block deal; promoter likely seller

Shares of Whirpool of India fell up to 4% in opening trade on Tuesday, driven by a surge in volume trade amid a report that its promoter, Whirpool Mauritius Ltd, looked to sell as much as 24% stake in the local unit via block deal. The floor price for the proposed transaction is expected to be ₹1,230 per share, a 7.6% discount to Monday’s closing price of ₹1,331.20 apiece. The transaction is likely to fetch $451 million (around ₹3,749 crore) to the promoter, as per report.

Early today, Whirpool of India shares opened lower at ₹1,284.00, down 3.5% against the previous closing price of ₹1,330.75 on the BSE. In the early deals, the stock fell as much as 4.5% to ₹1,271.25, while its market capitalisation dipped to ₹16,400 crore. On the volume front, more than 3 crore shares changed hands over the counter compared to two-week average of 2,791 shares. The stock is hovering around its 52-week low of ₹1,256.60 touched on February 23, 2023, while it hit its 52-week high of ₹1,733 on October 12, 2023.

Whirpool plans to sell a minimum of 15% shares in the Indian unit for $282 million, with the option to sell additional 9% stake worth $169 million at the proposed price.

Whirpool Mauritius, which holds 75% shares in the consumer appliance maker, had earlier indicated that it would trim its stake in the Gurgaon-headquartered company to pare its debts, which will enhance balance sheet flexibility. On November 30, 2023, Whirlpool Corporation had said in a U.S filing that it would sell up to 24% of its shareholding in Whirlpool of India in 2024 in one or more transactions.

"The company maintains a 75% ownership interest in Whirlpool India through a wholly-owned subsidiary, and intends to retain a majority interest in Whirlpool India following completion of such transaction or transactions," it had said in the exchange filing.

"Proceeds expected to be used for debt repayment are incremental to the $500 million term loan repayment that the company previously disclosed it expects to pay in the fourth quarter of 2023," it added.

Earlier this month, Whirlpool of India reported a 12% growth in its consolidated net profit at ₹29.93 crore for the third quarter ended December 2023, compared to ₹26.71 crore in the corresponding quarter in the previous fiscal, aided by volume growth. The consolidated total revenue from operations of the consumer durables maker stood at ₹1,535.7 crore, up by 17.9% YoY.

“We had a strong quarter on revenue and volume growth on the back of our recently launched innovations being fully available in the marketplace, competitive pricing indices compared to a year ago, a significant step up in all executional areas, driving premiumisation across categories and also aided by Diwali seasonality this year,” said Narasimhan Eswar, Managing Director Whirlpool of India. 

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