Adani looks to raise $2 bn in first share sale since Hindenburg expose

NEW DELHI: Billionaire Gautam Adani’s conglomerate is looking to raise $2-2.5 billion through an equity share sale in the boldest comeback strategy after the ports-to-energy conglomerate was rocked by allegations of fraud levelled by a US short seller.

Boards of two group companies will meet on May 13 to consider fundraising, according to stock exchange filings.

“A meeting of the board of directors of Adani Enterprises Ltd will be held on Saturday, May 13, 2023, at Ahmedabad, inter alia, to consider and approve the proposal of the raising of funds by way of issuance equity shares or any other eligible securities through permissible modes, including but not limited to a private placement, a qualified institutions placement, preferential issue, or any other method or combination of methods,” the firm said in the filing.

Adani Green Energy Ltd - the group’s renewable energy company - too sent out a similarly worded filing.

Neither of the two companies disclosed how much money they intend to raise.

Sources aware of the matter said the group may be looking at raising between $2 billion and $2.5 billion, with investors in Europe and the Middle East evincing strong interest.

This comes three months after Adani Enterprises Ltd was forced to abort a Rs 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 sources said the company stock which was offered in the price range of Rs 3,112 to Rs 3,276 per share in the FPO is now available at Rs 1,984 (at Thursday’s closing price).

US short-seller Hindenburg Research in January released a damning report alleging accounting fraud and stock price manipulation at the Adani group, triggering a stock market rout that had erased about $145 billion in the conglomerate’s market value at its lowest point.

Adani group has denied all allegations by Hindenburg and is plotting a comeback strategy.

The group has recast his ambitions as well as prepaid some loans to assuage investors.

Promoters in March sold stakes worth Rs 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.