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Business Standard
an hour ago
- Business Standard
Reliance, Havells in race to acquire majority control in Whirlpool India
Reliance Retail and appliance maker Havells India have entered the race to buy a majority stake in Whirlpool of India Ltd, the listed subsidiary that contributes the bulk of Whirlpool Corporation's Asian revenue, according to a report by The Economic Times. The two strategic suitors are up against global buyout specialists EQT and Bain Capital, while TPG Capital has begun due-'diligence. What the US parent company wants Michiga-'based Whirlpool Corp is marketing roughly 31 per cent of its Indian arm while planning to keep around 20 per cent through its vehicle Whirlpool Mauritius Ltd. The sale forms part of a sweeping global overhaul announced at the end of 2022, after the company reported a $1.5 billion loss. Since then, Whirlpool has pruned operations in parts of Asia and Europe, trimmed headcount, and shifted focus to smaller countertop appliances such as blenders and coffee makers. Goldman Sachs launched a formal auction in April, and the parent company hopes to raise net proceeds of $550-600 million (₹4,684 crore-₹5,110 crore). As the deal involves a change of control, Indian takeover rules will trigger an open offer for a further 26 per cent from public shareholders. If fully accepted, the acquirer could emerge with a 57 per cent holding. A valuation that keeps moving Public investors currently own 49 per cent of Whirlpool of India. In February 2024, the parent cut its stake by 24.7 per cent via block trades worth ₹4,039 crore, selling to domestic mutual funds such as SBI MF and Aditya Birla Sun Life MF and to Societe Generale. After the plan to become a minority shareholder was announced on January 30, the stock slid from ₹1,577 to a 52-week low of ₹899 on March 3. It has since rebounded to ₹1,329, valuing the company at about ₹16,861 crore. At that level, a 57 per cent stake would cost roughly ₹9,610 crore, the news report said. Margin worries cloud enthusiasm 'There are concerns around the low-margin business of Whirlpool India, which has a dominant play only in entry-level products and has missed the premium play, unlike competitors such as LG, Samsung or Haier,' said an industry executive, as quoted by the news report. Another sticking point is future royalty payments to the parent. Next steps in the auction Whirlpool Corporation's chief financial and administrative officer James W Peters told analysts last month that the India process has 'generated significant interest from large third-party investors'. He expects cash to arrive in the second half of 2025 and plans to deploy it to repay or refinance debt, as the company did after previous divestments, The Economic Times report mentioned. Bankers caution that if final bids fall short of expectations, the parent company could once again tap the open market — a quicker route that sidesteps thorny royalty negotiations. For now, shortlisted strategics and financiers are poring over data rooms, testing assumptions about margins, brand strength in smaller towns and the scope to move Whirlpool up the price ladder, the news report said.
Economic Times
an hour ago
- Economic Times
Bayern Munich vs Boca Juniors: Live streaming info, date, time, venue and other details
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Business Standard
an hour ago
- Business Standard
Govt plans ₹5,000 cr boost for rare earths amid China export curbs
India is finalising a ₹3,500-5,000 crore scheme to ramp up local production of rare earth minerals and the magnets made from them, The Economic Times reported today. A senior government official was quoted as saying that the plan could get official approval within two weeks. Since April, China has limited its exports of rare earth materials. This move has caused difficulties for automakers and tech manufacturers around the world. Industries in the US, Europe, and India are facing shortages of essential magnets. Domestic firms express interest At least five major Indian companies have shown preliminary interest in producing rare earth materials, according to the government official quoted by The Economic Times. The government will offer benefits through a reverse auction process under this upcoming scheme, it is said. The proposal for these incentives came after a ministerial review suggested India needed to diversify its sourcing channels. The automobile industry in particular raised concerns about the impacts of Chinese restrictions and requested government support. Although India possesses 6.9 million metric tons of rare earth reserves, the fifth-largest globally, it lacks any domestic magnet manufacturing capacity. India relies on imported magnets, mainly from China. In the financial year 2024-25(FY25), India imported 53,748 metric tons of rare earth magnets, government data showed. China's control over global magnet supply China makes around 90 per cent of the world's permanent rare earth magnets. It has used this strong position in the ongoing trade conflict with the United States. Export controls introduced on April 4 affect not only seven specific rare earth elements but also magnets that include even small amounts of these materials. China's rare earth exports drop sharply China's exports of rare earth products dropped to a five-year low in May. Exports fell by 61 per cent compared to the same time last year — down to 2,117 tonnes, according to Bloomberg. This is the lowest since February 2020. These products, different from raw minerals and metals, are mainly in the form of magnets. Govt planning regulatory tweaks To support its critical minerals programme, the Indian government plans to amend the Mines and Minerals (Development and Regulation) Act. Alongside regulatory changes, the government expects small-scale commercial production of rare earth permanent magnets to begin later this year within India. India to stop rare earth exports to Japan India has asked state-run company Indian Rare Earths Ltd (IREL) to end a 13-year-old rare earth export deal with Japan. The government wants to ensure that local needs are prioritised. IREL also aims to improve India's capacity to process rare earth materials. Commerce Minister Piyush Goyal told IREL to halt the export of rare earths, especially neodymium, which is widely used in magnets for electric vehicle motors.
