The shares of one of India’s major home appliance exporters tumbled 5 percent to Rs 1,493 per share after its parent company announced plans to sell a 24 percent stake in its Indian arm business next year.
Whirlpool of India Ltd is a mid-cap stock with a market capitalization of Rs 18,903 crore. Its parent company currently holds a 75 percent stake in Whirlpool India through a wholly-owned subsidiary.
On November 30, 2023, Whirlpool Corporation announced that it had entered into one or more transactions to sell up to 24 percent of its ownership interest in Whirlpool of India Limited (“Whirlpool India”) in 2024. the company said in a regulatory filing, which was shared on BSE by Whirlpool of India.
The Company expects to use transaction proceeds to reduce debt levels, which will enhance the company’s balance sheet flexibility. Proceeds expected to be used for debt repayment are incremental to the $500 million term loan repayment.
The funds are expected to be used for debt repayment in addition to the $500 million term loan repayment.
The Company continues to consider India as a large growth market and an important aspect of its growth plan. The Company remains committed to expanding the business with new product launches and the recently acquired Elica India business. As per the filing.
The company’s revenues fell by 5.5 percent year on year from Rs 1,611 crore in Q2FY23 to Rs 1,521 crore in Q2FY24, while net profit declined by 22 percent in the same period, from Rs 49 crore to Rs 38 crore.
In FY22, sales accounted for approximately 96 percent of revenues, with sales of services accounting for the remaining 4 percent.
Apart from the Indian market, the company also services various SAARC and ASEAN nations. Export sales contributed to almost 5 percent of total revenue in FY22.
Currently, the firm owns and runs three production sites in Faridabad (Haryana), Pune (Maharashtra), and Puducherry.
As of a recent quarter shareholding pattern, the company promoter holds a 75 percent stake in the company, while Domestic Institutional Investors hold a 12.95 percent stake and retail investors hold an 8.56 percent stake.
Whirlpool of India Ltd is one of the leading manufacturers and marketers of major home appliances in the country. The company’s product portfolio includes refrigerators, washing machines, air conditioners, microwave ovens, built-in and small appliances, etc.
At the time of writing this report, Whirlpool of India shares were trading at Rs 1,497 per share, down 4.70 percent from the previous close price.
Written by Omkar Chitnis
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