Eureka Forbes promoter to sell 12% stake for $138.6 million

Advent International had bought a majority stake in Eureka Forbes from Shapoorji Pallonji Group for ₹4,400 crore in 2021. Lunolux is an entity held by Advent International. As on December 2023, it held around 72.56% stake in the company.

The block deal will be offered at a floor price of ₹494.75 per share, a 3% discount from Wednesday’s closing price of ₹510.05 on BSE, the deal term sheet reviewed by Mint shows. IIFL Securities is managing the sale on behalf of the promoter.

Lunolux held a 72.56% stake in Eureka Forbes as of 31 December. Around 19.34 million shares in the Indian unit will be sold, with an option to sell an additional 23.21 million shares.

The deal comes even as Eureka Forbes has underperformed the market, with its annual return at 6.17% compared to the Sensex’s 19.7% return in the same period. However, the company reported a 13.9% year-on-year increase in revenue to ₹539.4 crore and a 233.86% increase in profit to ₹22.97 crore.

The deal has a 90-day lock-up on the seller if the upsize option is not fully exercised; else, 12 months lock-up on the seller’s residual stake, as per the terms of the deal.

For Advent, this is deleveraging its position and taking some money off the table from its three-year-old bet in India’s bulging consumer segment. It is also looking to sell stakes in Bharat Serum Vaccines and Manjushree Technopack.