Two Adani Group companies — Adani Enterprises (AEL) and Adani Transmission (ATL) — plan to raise up to a total of Rs 21,000 crore through qualified institutional placements (QIP) or other modes.
On its part, AEL plans to raise up to Rs 12,500 crore, while funds raised by ATL would be about Rs 8,500 crore. The purpose of this initiative is to secure additional capital for the companies’ operations and growth strategies, the two firms informed bourses in separate updates.
The fund raising would be through issuance of shares, securities or other permissible modes, for which the companies will seek shareholders’ approvals through a postal ballot, it added.
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AEL is the flagship company of the group, while ATL is the largest private power transmission and distribution company in India.
Earlier on Wednesday, three group companies — Adani Enterprises, Adani Green and Adani Transmission — had informed the bourses of convening board meetings to take a call on the fundraising plans.
However, Adani Green Energy deferred its board meeting to May 24, citing ‘certain exigencies’.
The fundraising plan comes after US-based short-seller Hindenburg Research released a report on January 24, outlining numerous issues of suspected fraud at the Adani Group, the second-largest conglomerate in India. The report resulted in the group’s market cap crashing by half to about Rs 9.25 trillion. Adani Group had denied all the allegations. However, Adani Enterprises’ plans to raise Rs 20,000 crore in January fell through in wake of the scathing short-seller report.
Abu Dhabi-based International Holding, which has invested almost $2 billion in Adani companies, does not plan to take part in any potential share sales, IHC’s spokesman told Bloomberg two days ago.
Adani Group companies are executing large-scale projects across infrastructure and utility space, including adding capacity at its cement business, and need cash flows for these. The firm was also in talks to raise about $800 million for new green energy projects.
The group had earlier received financial assurances from three Japanese banks — Mitsubishi UFJ Financial Group, Sumitomo Mitsui Banking and Mizuho Financial Group — which include loans for new projects and refinancing of high-cost debts. Its existing lenders, including Standard Chartered and Barclays, had also reaffirmed their confidence in the group’s operations.
Earlier in March, Adani Group sold minority stakes in four of the conglomerate’s listed companies — AEL, ATL, Adani Ports and Special Economic Zone (APSEZ) and Adani Green Energy -— to American equity investment boutique GQG Partners for Rs 15,446 crore.
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The group’s debt as of March 31, 2023, stood at Rs 2.27 trillion, of which 39% was in bonds, 29% loans from international banks and 32% with Indian banks and NBFCs. The gross value of the group’s assets was at Rs 3.91 trillion.
The group, which had estimated to post an EBITDA of Rs 61,200 crore for FY23, a 20% growth over the last financial year, was expecting growth to come in from its core infrastructure business, allied businesses such as cement, AEL’s existing and FMCG businesses among others, it had said at various investor shows.
In April, APSEZ had launched a tender offer for bonds worth $130 million, which the company will use to partly pre-pay near-term debt maturities. This was the first buyback by an Adani Group company, after the Hindenburg Research report.
