Adani Group in $3.5-bn fund raising drive
Adani Enterprises to raise Rs16,600 cr while Adani Energy Solutions plans Rs12,500-cr mop-up via QIP route
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New Delhi: Adani Enterprises Ltd, the flagship firm of billionaire Gautam Adani’s conglomerate, on Tuesday said its board has approved raising up to Rs16,600 crore ($2 billion) through share sale.
The announcement came a day after the group’s power utility Adani Energy Solutions Ltd got a similar approval for raising up to Rs12,500 crore via qualified institutional placement (QIP) or through any other permissible modes. The fundraising may happen in one or more tranches, Adani Enterprises said in a stock exchange filing. Both the companies will need other approvals including from shareholders. While Adani Enterprises Ltd has called a shareholder meeting on June 24 for approving the fund raise, Adani Energy Solutions Ltd’s annual general meeting (AGM) is scheduled the next day. Both the firms secured similar approvals in 2023, but those approvals were set to expire in June, triggering the need for a fresh nod.
In May 2023, the board of Adani Enterprises had approved a fundraise of Rs12,500 crore via QIPs. That month, Adani Energy Solutions, too, got a board nod for raising Rs8,500 crore through QIP. A QIP is, at its core, a way for listed companies to raise capital without having to submit legal paperwork to market regulators. Raising money from institutions like banks and private equity funds will broaden the two companies’ shareholder count - one of the key criticisms against the Adani group - as well as increase their heft globally.
It would also result in decrease in promoter Adani family stake in the post-equity capital of the companies. Adani family holds 72.61 per cent in Adani Enterprises Ltd and 73.22 per cent in Adani Energy Solutions Ltd. The two firms had not gone ahead with the 2023 board nod to raise funds. The board approvals for fundraising are enabling resolutions so that the companies can act quickly whenever they find the best financing terms. It, however, is not mandatory for them to raise those funds.
The apples-to-airport conglomerate has stepped up capital spending as it recovered from the blow a damning report of US short seller Hindenburg Research inflicted last year. Adani Group’s stocks at their lowest point took a beating of about $150 billion in market value, but have since recovered. Four of the 10 listed Adani firms have risen to pre-Hindenburg levels and tycoon Adani’s net worth has surged $25 billion this year to go past $109 billion. He is now ranked at No 13 in the world, just one rank below Mukesh Ambani, who is worth $114 billion. The group’s claw-back strategy that included reining in debt and slowing pace of neck-break speed expansion, also saw it raise about Rs45,000 crore from marquee investors.
