$1 Billion Stake Sale: Whirlpool of India and Advent International deal, what went wrong?

Synopsis: Home appliances maker, Whirlpool of India Ltd saw its stock drop to an intraday low of Rs 916 on Monday. This article explains the key reasons behind the sudden share price fall and what triggered the sharp decline

On Monday morning, the market saw the small cap stock of Whirlpool of India Ltd hit an intraday low of Rs 916, which is 3.5 percent fall from the previous close of Rs 949.45. 

With a market cap of Rs 11,662 crore, Whirlpool of India Ltd has seen its stock plunge by 50 percent over the past year. The long term trend also remained weak as well, with the stock delivering -57.6 percent returns over five years and -40  percent over three years.

What’s the News?

On Monday morning, Whirlpool of India Ltd came under the spotlight after the collapse of a proposed $1 billion stake sale deal with Advent International. The plan involved Advent acquiring a 31 percent stake, which had triggered a mandatory open offer for an additional 26 percent stake under Indian regulations, which would give the acquirer a majority control in the Whirlpool Corp’s strategy of offloading up to 51 percent of its holding to 20 percent in order to reduce the company’s debt.

However, this deal fell through due to over-sharp valuation differences, as Advent cited short-term regulatory and competitiveness challenges, while Whirlpool insisted on a higher price in order to meet debt repayment goals. Despite reporting a 16 percent rise in its FY24 revenue, Whirlpool of India continues to face strong competition from rivals like LG Electronics India and Samsung Electronics, these factors were the ones which raised concerns over future growth momentum of the company. 

Financial Overview

In the latest quarter Whirlpool of India Ltd saw its YoY revenue fall by 3.8 percent, going from Rs 1,713 Cr in Q2FY25 to Rs 1,647 Cr in Q2FY26, while the QoQ went down by 32 percent from Rs 2,432 Cr in Q1FY25.

The YoY Net Profits fell by 22 percent, going from Rs 54 Cr in Q2FY25 to Rs 42 Cr in Q2FY26, while the QoQ fall was at 71 percent from Rs 146 Cr in Q1FY25. Even after these declining numbers, the company’s dividend payout stands at 17.7 percent and also has managed to significantly reduce its debt in the latest quarter. 

Headquartered in Gurugram, whirlpool of India Ltd is a leading home appliance manufacturer and marketers in the country, known for its strong presence across kitchen and laundry products. It is a subsidiary of the global major Whirlpool Corporation, the company is focused on delivering innovative, reliable, and energy-efficient appliances aimed at improving life at home.

-Adithya Menon

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