Whirlpool India shares fall 20% after parent announces further stake sale by year-end

Shares of Whirlpool of India Ltd. have opened 20% lower after Whirlpool Corporation, parent company of consumer durables manufacturer Whirlpool of India Ltd. has announced its intention to sell down its ownership stake further from the existing 51% to up to 20% by mid-to-late-2025.

Whirlpool Corporation made the announcement alongside its quarterly earnings release and nearly a year after selling 24% stake in the Indian arm on February 20 last year.

In case this does happen, Whirlpool Corporation will become a minority shareholder as its stake will drop below 26%. Whirlpool Corporation currently owns a 51% stake in the company.

"Whirlpool Corporation expects to remain the largest shareholder following completion of the anticipated sell-down," the statement read.

Whirlpool Corporation had sold 24.7% stake in Whirlpool India

on February 20, 2024 in a deal valued at ₹4,039 crore. Shares had exchanged hands at an average price of ₹1,280 per share. The stock, with the 20% lower circuit is now trading below that level.

Back then, Whirlpool Corp. CEO Marc Bitzer had cited higher valuations of the Indian unit behind the company's decision to pare some stake. He had also said that they remain confident of the long-term business prospects in India.

Since then, the stock jumped 91% in value over the next eight months to make a high of ₹2,449 on October 22 last year. However, the stock has corrected 36% from those levels as of Wednesday's closing.

"Whirlpool India will remain a relevant part of Whirlpool Corporation's portfolio, and we continue to believe Whirlpool India has a strong long-term trajectory for growth. We intend the anticipated sell-down to result in autonomy for Whirlpool India to adjust to the ever-evolving industry conditions, enabling Whirlpool India to focus on accelerated growth and utilise its well-funded business to invest further in the business," Whirlpool Corp's statement said.

The parent company added that sustained brand license and technology agreements, as well as transition commitments will continue to support business operations and the long-term growth of Whirlpool.

Whirlpool of India shares ended little changed on Wednesday at ₹1,575.