Adani has raised $1.4 billion via the sale of stakes in three companies, bringing its total in the last four years to $9 billion.

Adani Enterprises Ltd, the group’s flagship company, will sell shares to investors to raise Rs 12,500 crore, while Adani Transmission will raise Rs 8,500 crore. Renewable energy firm seeks Rs 12,300 crore.

by Akash Jha July 9, 2023, 10:09 PM 13 Views

Billionaire Gautam Adani has raised USD 1.38 billion (Rs 11,330 crore) through the sale of stakes in three group firms. This brings the total capital raised by the conglomerate over the past four years to USD 9 billion as the conglomerate continues to attract interest from a diverse range of investors. The ports-to-energy conglomerate issued the following statement: “is committed to raising capital to fulfill its 10-year roadmap of the transformative capital management program, which was formulated in 2016 to execute the plans for various portfolio companies.”

“In the most recent instance, the Adani family has raised USD 1.38 billion (Rs 11,330 crore) through the sale of stakes in the three portfolio companies,” it added. “These companies are Adani Enterprises Ltd, Adani Green Energy Ltd, and Adani Transmission Ltd.”

“This ensures higher capital availability at the group level, for growth as well as near-term commitments of both debt and equity for the portfolio companies over the next 12 to 18 months,”

As the organization continues to build on a recovery strategy to escape from charges of fraud leveled by a US short-seller, each of the three portfolio companies have also secured board approval for main issuances through a share sale to investors.

The main company of the group, Adani Enterprises Ltd., intends to raise Rs. 12,500 crore through the sale of shares to investors, and the company that is responsible for the transmission of energy, Adani Transmission, seeks to raise Rs. 8,500 crore. Its renewable energy firm is planning to raise a total of 12,300 crore rupees.

This news comes five months after Adani Enterprises was compelled to call off a follow-on public offering (FPO) with a total value of Rs 20,000 crore as a result of the Hindenburg report.

A short-seller in the United States named Hindenburg Research published a damaging study in January alleging accounting fraud and stock price manipulation at Adani Group. This report triggered a stock market rout that had destroyed around USD 145 billion in the conglomerate’s market value at its lowest point.

Adani Group has refuted all of Hindenburg’s charges and is preparing a recovery strategy that involves redefining its goals, abandoning its plans to acquire other companies, prepaying debt to resolve concerns regarding its cash flows and borrowings, and reducing the rate at which it is spending money on new projects.

Since May, the promoters have sold shares to GQG Partners, a major US-based global equity investment boutique in two separate transactions. The most recent time that money was raised was earlier this month when 1.38 billion USD was collected.

“A similar stake-sale by the family in March 2023 aggregating to USD 1.87 billion (Rs 15,446 crore), resulted in full prepayment of margin-linked, sharebacked financing and created flexibility in a rising rate environment to equitize debt capital as and when due,” the statement said, along with investor roadshows, early debt repayments, and plans to scale back its pace of spending on new projects. “Adani Group, which started the capital transformation journey for its core infrastructure portfolio in 2019, has raised over USD 9 billion in a short span of four years,” it stated. “This is a significant milestone for the company.”

“The programme paved the way for long-only global investors to participate in the world’s largest and fastest-growing infrastructure development,” which is where the Adani portfolio offers a one-stop play through its portfolio companies spread across the infrastructure spectrum, from energy and utility to transport and logistics.

It has been successful in luring investments in a number of different listed firms, including Adani Ports and Special Economic Zone Limited (APSEZ), Adani Green Energy Limited (AGEL), Adani Transmission Limited (ATL), Adani Total Gas Limited (ATGL), and Adani Enterprises Limited (AEL).

“In line with the group’s capital management philosophy of enabling participation of strategic long term investors, Adani has attracted large-scale investments from the likes of Qatar Investment Authority (QIA), TotalEnergies (TTE), International Holding Company (IHC), as well as GQG Partners (GQG), along with its co-investors Australia Super, Goldman Sachs, University of Texas, Delaware Public Employees Retirement System, Master Trust Bank of Japan, Missouri Education PERS, and others.”

While TTE spent USD 3.3 billion in a joint venture with APSEZ, ATGL, and AGEL in April 2019, QIA invested USD 452 million in ATL in February 2020. IHC made a USD 2 billion investment in AEL, ATL, and AGEL in May of the previous year, while GQG made a USD 3.19 billion investment in AEL, ATL, AGEL, and APSEZ this year.

“The faith and confidence demonstrated by these significant global investors is confirmation of the underlying strength of the group’s companies and the Adani Group’s commitment to the highest level of governance. Additionally, the success of the investment program illustrates the group’s capability to raise capital across enterprises at each stage and accomplish the goals that were outlined in the statement.

AEL is one of the largest business incubators in the world and focuses on the construction of enterprises related to infrastructure. Among its strategic focuses are the airport and the company using renewable hydrogen. Decarbonization of industrial and mobility sectors would be made possible with the use of green hydrogen, which will also support India’s push toward primary energy self-sufficiency.

In terms of GW of renewable energy capacity by 2030, AGEL will be the largest and fastest-growing renewable power firm in the world. In addition, it will be the lowest cost generator of renewable power.

ATL is the largest private energy solutions company in India, having a presence in electricity transmission and distribution as well as a rising focus on smart metering. ATL also has a foothold in other energy-related industries. Smart meters are key instruments for the decarbonization of the energy industry since they will help electricity distribution firms to easily incorporate and schedule renewable energy into power networks.