Adani to raise Rs 21,000 cr from share sale in two group companies

Billionaire Gautam Adani’s conglomerate will raise ₹21,000 crore (more than $2.5 billion) by selling shares in two companies in the group in the boldest comeback strategy after the port-to-energy conglomerate was rocked by fraud allegations leveled by a US short seller.

Adani Enterprises Ltd, the flagship company of the group, plans to raise Rs 12,500 crore while the companies said in stock filings another power transmission company Adani Transmission of Rs 8,500 crore.

The board of directors of Adani Green Energy Ltd, the renewable energy arm, was also due to meet on Saturday to collect donations, but the meeting was postponed to May 24.

Funds will be raised by issuing shares to qualified institutional buyers. Sources familiar with the matter said investors in Europe and the Middle East showed strong interest.

In the exchange filing, Adani Enterprises said its board of directors on Saturday agreed to “raise funds by issuing … an aggregate amount not exceeding Rs 12,500 crore or its equivalent via a Qualified Institutional Placement (QIP) or other status permitted as per applicable laws.” with it.”

Adani Transmission said in a separate filing that its Board of Directors has agreed to “raise funds by issuing such number of shares of par value each of the Company and/or other Qualifying Securities or any combination thereof, for a lump sum not exceeding Rs.8,500 crore or an amount equivalent thereof via QIP or other mode permitted by applicable laws.”

This comes three months after Adani Enterprises was forced to abort its Rs 20,000 crore follow-up public offering (FPO) in the wake of the Hindenburg Report.

The show was fully subscribed but the company refunded the subscribers. Sources said the company’s stock which was offered in the price range of Rs 3,112 to Rs 3,276 on FPO is now available at Rs 1,964 (Friday’s closing price).

US short seller Hindenburg Research in January released a damning report alleging accounting fraud and share price manipulation in the Adani Group, which led to a stock market crash that wiped out about $145 billion from the conglomerate’s market value at its lowest point.

The Adani Group has denied all of Hindenburg’s claims and is planning a comeback strategy. The group has reformulated its ambitions as well as prepaid some loans to appease investors.

In March, the promoters sold stakes worth Rs. 15,446 crore in four subsidiaries of the group to US-based global equity investment firm GQG Partners.

The group has been trying to restore market confidence with a series of investor roadshows, paying down debt early and planning to reduce the pace of spending on new projects.

The money the Adani Group is looking to raise would be the group’s biggest borrowing since the Hindenburg report on January 24. The money raised is intended to be used to finance the group’s expansion projects.