Shares of Whirlpool of India were sliding on Friday on reports that the household appliances firm’s parent company was looking to divest its stake in the Indian unit.

What Happened: US-based Whirlpool Corporation, is poised to divest a 24% stake in its Indian subsidiary to pare down debt.

Presently, Whirlpool Corporation maintains a 75% ownership in Whirlpool India and aims to retain a significant interest in the company post-transaction. The proceeds from the stake sale will be allocated towards debt reduction, bolstering the company’s balance sheet flexibility, as stated in regulatory filings.

See Also: AI-Powered Apps And Self-Care Innovations Dominate Google’s 2023 Play Store Awards

Why It Matters: Whirlpool specified in a regulatory filing, “Proceeds expected to be used for debt repayment are incremental to the $500 million term loan repayment that [Whirlpool] previously disclosed it expects to pay in the fourth quarter of 2023.”

Despite the divestment, India continues to be a vital market for substantial growth, aligning with Whirlpool’s overall growth strategy, according to the firm. Consequently, it said the announcement is not anticipated to impact the previously provided full-year guidance.

In the last six months, Whirlpool of India’s stock has witnessed a growth of 10.15%. In comparison, the benchmark Nifty 50 has seen a rise of 8.9% during the same period.

Foreign institutional investors (FIIs) and domestic institutional investors (DIIs) hold 3.5% and 13% of the company, respectively, while the public owns an 8.6% stake.

Price Action: Whirlpool India shares were down 3.09% at ₹1,522.37 near the start of trade on Friday.

Read Next: Apple’s In a Hurry To Get Its India iPhone Makers To Step Up Production By Next Year: Here’s Why