Adani Raises $3.5 bn in share sale across three group firms

Adani Group aims to secure $4 Billion for green hydrogen projects

Adani Group’s Billionaire Gautam Adani is embarking on a bold strategy to make a comeback after a damaging report from a US short seller, by aiming to raise approximately USD 3 billion through an equity share sale to institutional investors.

The conglomerate’s flagship firm, Adani Enterprises Ltd, along with electricity transmission company Adani Transmission Ltd, have already obtained board approval to raise over USD 2.5 billion through share sales to qualified institutional investors. In addition, Adani Green Energy Ltd is expected to seek board approval to raise up to USD 1 billion within the next few weeks.

Following the necessary board approvals, Adani Enterprises Ltd and Adani Transmission Ltd are now seeking shareholder approval. Adani Green Energy Ltd’s board is scheduled to convene in early June to approve the fundraising plan. It is anticipated that the entire fundraising amount of USD 3.5 billion, aimed at fulfilling the group’s capital expenditure requirements, will be concluded in the second quarter (July-September) of the current fiscal year.

The fundraising will involve issuing shares to qualified institutional buyers. Sources familiar with the matter have revealed that investors from Europe and the Middle East have shown strong interest in participating. Existing investors are likely to subscribe to the offer, and new investors may also join in. GQG Partners, which invested USD 1.87 billion in four Adani group companies in March, is expected to continue its support, showcasing their continued interest in the conglomerate.

The sources have emphasized that investors still believe in the growth potential of the Adani Group and have expressed their eagerness to invest more capital. The fundraising plans were solidified after extensive roadshows abroad, engaging with various financial institutions and investors.

This development comes three months after Adani Enterprises had to cancel a follow-on public offering (FPO) worth Rs 20,000 crore due to the Hindenburg report. Although the offer was fully subscribed, the company decided to return the money to subscribers. The company’s stock, which was initially offered in the price range of Rs 3,112 to Rs 3,276 during the FPO, is currently trading at Rs 2,494.25 (closing price as of Wednesday).

Also Read: Centre to Divest Stake in Coal India, OFS at Rs 225

In January, US short-seller Hindenburg Research released a damaging report, accusing Adani Group of accounting fraud and stock price manipulation, resulting in a significant decline in the conglomerate’s market value, wiping out approximately USD 145 billion at its lowest point. Adani Group has vehemently denied all allegations made by Hindenburg and is now strategizing its comeback.

In March, the group’s promoters sold stakes worth Rs 15,446 crore in four group companies to GQG Partners, a prominent US-based global equity investment boutique. The group has been actively working to regain market confidence through investor roadshows, early debt repayments, and a scaled-back approach to spending on new projects.

The funds sought by Adani Group through this share sale will represent its largest borrowing since the Hindenburg report on January 24. The raised capital will be utilized to finance the group’s expansion projects.

About Adani Group:

Adani Group includes the international holding firm Adani Enterprises Limited, which is registered on the stock exchange in India. Its headquarters are in Ahmedabad, and its main activities include coal and iron ore mining and trade.

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