31 Jan , 2025 By : Debdeep Gupta
Shares of Whirlpool of India extended its losing streak to the fifth consecutive session, shedding 33 percent of its value in that period. Though the stock has been in the red for five days, the majority of losses were incurred in the previous session when it was locked in the 20 percent lower circuit.
At 10.21 am, shares of Whirlpool of India were trading at Rs 1,183.05 on the NSE. The steep fall in today's session was further intensified by heavy trading volumes. As many as 10 lakh shares of the company changed hands on the exchanges thus far, already 10 times the one-month daily traded average of one lakh shares.
The stock was hammered in the last session after Whirlpool India's holding company, Whirlpool Corporation announced its intention to trim down its stake in the Indian unit to about 20 percent by mid to late 2025. The parent entity plans to execute the stake reduction through one or more open market transactions, which will see its ownership come down from the current 51 percent.
This development came nearly a year after the company sold around 24 percent of its stake in the Indian unit for approximately $468 million earlier last year as part of efforts to reduce debt.
At the time, Whirlpool Corp CEO Marc Bitzer told CNBC that the decision to sell the stake was driven by Whirlpool India’s high valuation, which stood at an earnings multiple of 50 times. “We are not leaving India,” he has emphasized. “We believe in India for the long term… but if we have a business trading at 50 times multiple, and your own company trades a lot lower, it’s an asset arbitrage,” Bitzer explained.
Whirlpool Corp anticipates net cash proceeds of $550-600 million from the transaction. Reports suggest that the sell-down will help optimize capital allocation, enabling Whirlpool to focus on core operations while retaining significant interest in the Indian market. This move aligns with the parent company's strategy to strengthen its balance sheet and maximize shareholder returns.
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