Welspun Corp arm sells 5% stake in associate entity for about Rs 480 crore

Welspun Corp. Ltd., a $5 billion company that has ventures in Pipe Solutions and Building Materials, has worked on some of the most difficult projects in the world, including the longest, heaviest, and deepest pipelines in the world. WCL has ventured into a state-of-the-art greenfield facility in Anjar, Gujarat, to manufacture ductile iron (DI) pipes with a total production capacity of 500,000 MT annually as part of its business growth and diversification strategy.

At EPIC, Welspun Corp Limited is selling a 5% stake

In exchange for 218.9 million Saudi Riyals (roughly Rs 480 crore), Welspun Mauritius Holdings Limited (WMHL) sold a 5% equity stake in East Pipes Integrated Company for Industry (EPIC).

In order to partially finance the USD 200 million capital expenditure for greenfield projects involving ductile iron (DI) and longitudinal submerged arc welding (LSAW) pipes in Saudi Arabia, it is recommended that WMHL reinvest the revenues from the sale of EPIC shares in Welspun Pipes Company, KSA (WPC), its new wholly-owned subsidiary. EPIC is Welspun Corp.’s step-down listed associate in the Kingdom of Saudi Arabia (KSA).

Welspun Corp said

Welspun Corp stated in an exchange filing that “on November 11, 2024, our wholly-owned subsidiary WMHL has divested a 5 per cent equity stake in EPIC in favour of identified financial investors in a series of negotiated trades on the Tadawul Stock Exchange, KSA, for an overall consideration of (Saudi Riyal) SAR 218.9 million (approximately USD 58 million).”

WMHL will continue to own 26.5% of EPIC

According to the filing, following this transaction, WMHL’s ownership of EPIC has increased from 31.5% to 26.5%, and the company will continue to hold the largest stake in the business.

In order to partially finance the USD 200 million capital expenditure for DI (ductile iron) and LSAW (longitudinal submerged arc welding) pipe greenfield projects in Saudi Arabia, WMHL plans to reinvest the proceeds from the sale of EPIC shares in its new wholly-owned subsidiary, Welspun Pipes Company, KSA (WPC).

Welspun Corp Ltd. today 3% down 

Welspun Corp. stock is trading right now at Rs. 741.90 per share and expecting more fall in the stock for offloading the stake holding in the EPIC.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.