Whirlpool plans to pare stake by over half in Indian arm

Kolkata: US-based home appliance maker Whirlpool Corp on Thursday announced it was going to reduce its stake in its Indian subsidiary, Whirlpool of India, from 51% to around 20% this calendar year by way of one or more market sales, which should generate net cash proceeds of $550-$600 million.

Whirlpool Corp said it "expects to remain the largest shareholder" of the Indian unit after this exercise, as per a stock market notification by the Indian subsidiary. The deal is likely to be completed by mid-to-end 2025. The share price of the Indian unit crashed on Thursday.

In the notice, Whirlpool Corp said the sell-down of its shareholding will result in "increased autonomy" of the Indian unit "to adjust to ever-evolving industry conditions," allow it to focus on accelerated growth, and utilise its well-funded business to invest further.

"Sustained brand license and technology agreements, as well as transition commitment, will continue to support business operations and the long-term growth of Whirlpool...We believe these actions will deliver value to Whirlpool India's shareholders," said the release quoting Whirlpool Corp chief financial and administrative officer James Peters.

Peters said Whirlpool India will remain a relevant part of Whirlpool Crop's portfolio and the company believes the Indian unit has a "strong long-term trajectory for growth."

The announcement by Whirlpool Corp was made before market hours with Whirlpool India share price crashing on Thursday. The Indian arm's share price fell by 20% to close at ₹1262.1 on the BSE when the benchmark Sensex went up by 0.3%.

Last February Whirlpool Corp had sold 24.7% in the Indian unit through block deals for an estimated ₹4,039 crore to reduce the debt of the parent.

Though Whirlpool was almost the first MNC electronic brand to enter India in late 1980s, it is a much smaller player compared rivals LG, Samsung and Haier who entered much later, or even home-grown companies like Voltas. Whirlpool India in FY24 had clocked sales of ₹6,332 crore and net profit of ₹167 crore. In contrast, LG India's sales in FY24 was ₹21,557 crore and net profit was ₹1,511 crore. Tata-owned Voltas clocked sales of ₹8,687 crore and net profit of ₹604 crore in the same period.