Adani Group in $3.5 bn fund raise: Adani Enterprises to mop up Rs 16,600 cr via QIP

NEW DELHI: Adani Enterprises Ltd, the flagship firm of billionaire Gautam Adani's conglomerate, on Tuesday said its board has approved raising up to Rs 16,600 crore (about USD 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 Rs 12,500 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 Rs 12,500 crore via QIPs. That month, Adani Energy Solutions, too, got a board nod for raising Rs 8,500 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 USD 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 USD 25 billion this year to go past USD 109 billion.

He is now ranked at No 13 in the world, just one rank below Mukesh Ambani who is worth USD 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 Rs 45,000 crore from marquee investors, including Qatar Investment Authority, Abu Dhabi based IHC, French giant TotalEnergies, and US based GQG Investment.

In the stock exchange filing, business incubator Adani Enterprises Ltd, which holds businesses ranging from airports to data centres, said its board "approved raising of funds by way of issuance of such number of equity shares having face value of Re 1 each of the company and / or other eligible securities or any combination thereof, for an aggregate amount not exceeding Rs 16,600 crore or an equivalent amount thereof by way of QIP or other permissible mode in one or more tranches." It, however, did not give details of the fund use.

Adani Enterprises in February last year called off a follow-on share sale through which it had raised Rs 20,000 crore as the group stock plunged following Hindenburg accusing the group of accounting fraud, stock manipulation and improper use of tax havens. Adani group has denied all allegations.