INQ Holdings, SBI funds, Citigroup biggest buyers in Adani Energy's USD 1 bn QIP

NEW DELHI: A unit of Qatar Investment Authority, SBI Mutual Fund, and foreign investment funds Nomura and Citigroup were the biggest buyers of shares in Adani group's power transmission unit's $1 billion QIP, according to a stock exchange filing by the company.

The Rs 8,373.10 crore ($1 billion) qualified institutional placement (QIP) of Adani Energy Solutions Ltd (AESL), which closed last week, saw over 120 investors seek shares in the firm that is into power transmission, distribution and smart metering business.

Billionaire Stanley Druckenmiller's family office-led investment firms were among the companies that sought shares of AESL in the QIP.

AESL in the filing said its board has approved allocation of over 8.57 crore shares to eligible qualified institutional buyers at the issue price of Rs 976 per share, reflecting a discount of Rs 51.11 (4.98 per cent) to the floor price of Rs 1,027.

Giving details of allottees who got more than 5 per cent of shares, it said INQ Holdings LLC, a wholly-owned subsidiary of QIA, cornered 15 per cent of the shares sold.

Two Mauritius funds of Citigroup bought 8.88 per cent of the shares sold while four SBI funds - SBI Infrastructure Fund, SBI Large & Midcap Fund, SBI Long term Advantage Fund Series IV and SBI Magnum Children's Benefit Fund - together took home 7.93 per cent of the shares.

Nomura Singapore Ltd ODI cornered 7.5 per cent of the shares, the filing showed.

INQ had in August last year acquired nearly 2.7 per cent in Adani Green Energy Ltd - the renewable energy firm of the conglomerate run by billionaire Gautam Adani. In 2020, it had acquired a stake in Adani Electricity Mumbai Ltd, a subsidiary of AESL.

The AESL QIP last week was oversubscribed six times and fetched demand of over Rs 50,000 crore against an issue size of $ 1 billion.

Duquesne Family Office and two other US-based long-only funds - Driehaus Capital Management and Jennison Associates - bought shares but AESL did not disclose the exact number of shares they bought since these were less than 5 per cent of the issue size, sources said.

The QIP issue marked the debut of highly prestigious long-only investors Duquesne Family Office, Driehaus Capital Management and Jennison Associates which are known for their strong performance.

These investors are known for investing only in companies with high governance and are known for staying invested for decades.

The QIP was the first public equity raise by the conglomerate since a damning Hindenburg report last year wiped away billions in shareholder value.

The demand generated made the AESL QIP the largest in the energy space.

Duquesne was founded by billionaire Stanley Druckenmiller, who along with George Soros in 1992 broke the Bank of England by shorting the British pound, leading to its crash and earnings over a billion dollars.

Adani Group has a history of introducing several long-only investors in the market. In the past years, it has brought large investors including GQG Partners and International Holding Company (IHC) besides QIA.

Other major global names that participated in the QIP include Blackrock, Jupiter Asset Management, and Eastspring.

Domestic mutual funds that have participated included HDFC Mutual Fund, Axis Mutual Fund, Bandhan Mutual Fund, LIC, WhiteOak, 360One among others.

Insurance companies including SBI Insurance, SBI Pension and ASK Asset Management have also participated, according to sources.

QIP is an instrument used by listed companies to raise funds from large institutions.

The fundraise is the first after Adani group's flagship firm scrapped a Rs 20,000 crore issue in February last year, following the Hindenburg report alleging accounting fraud and stock manipulation.

Though the group vehemently and repeatedly denied all allegations, listed companies of the conglomerate at one point saw over $150 billion of their market value being wiped out.

While the group has largely recovered, a successful QIP is being seen as a powerful vote of investor confidence in the tycoon.

Separately, Adani Enterprises Ltd, the flagship firm of the group, is looking to revive its first-ever public sale of bonds. It plans to raise as much as Rs 600 crore.

The company has hired Trust Investment Advisors, AK Capital Services and Nuvama Wealth Management as lead managers for the issuances.

The group had tapped the dollar bond market in March this year - the first time since the Hindenburg report - when its solar energy unit Adani Green Energy Ltd and associated firms got bids of about $2.9 billion.