Adani Group to raise $3.5 billion through share sale in 3 companies

Billionaire Gautam Adani-led group is set to raise $3.5 billion through an equity share sale to institutional investors in the boldest comeback strategy after US short-seller Hindenburg Research levelled accusations against the ports-to-energy conglomerate of stock manipulation and financial wrongdoings.

While boards of Adani Enterprises Ltd and electricity transmission company Adani Transmission Ltd have already approved raising up to ₹21,000 crore (over $2.5 billion) through share sales to qualified institutional investors, the board of Adani Green Energy Ltd is likely to do so for raising up to $1 billion in the next couple of weeks, according to news agency PTI.

After the board approvals, Adani Enterprises Ltd and Adani Transmission Ltd have sought shareholder approval. Adani Green Energy Ltd’s board may meet in the first or second week of June for approving the fundraising.

The entire fundraising of $3.5 billion, which would go to fund the capital expenditure needs of the group, is likely to be completed within the second quarter (July-September) of the current fiscal.

The fundraising will be through the issue of shares to qualified institutional buyers. Investors in Europe and the Middle East have evinced strong interest and some of the existing investors are likely to subscribe to the offer and some new investors may also join in, according to PTI.

GQG Partners, which invested $1.87 billion in four Adani group companies in the first week of March, too may join, demonstrating the investor’s continued interest in the conglomerate. 

The fundraising was finalised after extensive roadshows abroad with a range of financial institutions and other investors. This comes three months after Adani Enterprises was forced to abort a ₹20,000 crore follow-on public offering (FPO) in the wake of the Hindenburg report.

The offer was fully subscribed but the company returned the money to subscribers. The company stock, which was offered in the price range of ₹3,112 to ₹3,276 in the FPO, is now available at ₹2,494.25 (at Wednesday’s closing price).

Promoters in March sold stakes worth ₹15,446 crore in four group companies to leading US-based global equity investment boutique GQG Partners. The group has been trying to win back market confidence with a series of investor roadshows, early debt repayments and plans to scale back its pace of spending on new projects.

The funds that Adani Group is looking to raise will be the conglomerate’s biggest borrowing since the January 24 Hindenburg report. The money raised is intended to be used for funding the group’s expansion projects.

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