Adani Group's flagship company Adani Enterprises plans to raise up to Rs175bn (US$2bn) in total from the sale of a 13% stake in Adani Wilmar on the Indian stock exchanges and the sale of a further 31% stake to its joint venture partner Wilmar International.

In a stock exchange announcement, Adani Enterprises said that Lence, a subsidiary of Singaporean food processing company Wilmar International, has agreed to buy 403.7m shares of Adani Wilmar at a maximum price of Rs305 each for a total Rs123bn from Adani Commodities, a subsidiary of Adani Enterprises.

A further Rs52bn will be raised from the 13% stake sale on local exchanges at a maximum price of Rs305 each. The offer for sale will take place before the stake sale to Lence in order to raise Adani Wilmar's free float to 25% from 12%. Singapore-listed Wilmar International currently owns 43.94% of Adani Wilmar.

Both transactions are subject to regulatory approvals. Once completed, they will mark Adani Enterprises' exit from Adani Wilmar, which was set up in 1999.

Adani Enterprises will use the proceeds from the sale to grow its energy, utility, transport and logistics businesses.

Wilmar International said in a separate filing that it will fund the acquisition through internal funds and borrowings. It is also exploring opportunities to bring in strategic investors into Adani Wilmar.

Shares in Adani Wilmar were trading down 7.2% at Rs305 on Tuesday morning.

The divestment come a little over a month after Adani Group chair Gautam Adani and seven other defendants, including his nephew and executive director of Adani Green Energy, Sagar Adani, were indicted in a federal court in New York in relation to allegedly agreeing to pay more than US$260m in bribes to Indian officials to obtain power supply contracts in a scheme that began "in or about 2020", according to the indictment. The US Securities and Exchange Commission has also brought a civil suit that alleges the company raised more than US$175m from US investors from a US$750m bond in September 2021 while the alleged bribery scheme was in place.

The group has denied the charges as "baseless".

Adani Green Energy had to pull a US$600m public bond deal on November 21 on news of the indictments and is now considering launching a US$500m private placement of US dollar bonds in Reg D format instead.

Adani Group is looking to come back to the public US dollar bond market by April to June next year, once its companies have made appropriate disclosures, Adani Group chief financial officer Jugeshinder Singh said on November 29.

"Until the individuals [who are charged] file their cases, and once there is clarity, then the companies can make appropriate public disclosures in their offering circulars," Singh said.

Source: IFR