Adani raises $9 billion in four years after selling its stake for $1.4 billion

As the conglomerate attracts interest from a variety of investors, billionaire Gautam Adani has raised USD 1.38 billion (Rs 11,330 crore) from equity sales in three group firms, bringing the total capital raised over four years to USD 9 billion.

The ports-to-energy conglomerate issued a statement in which it said that it “is committed to raising capital to fulfill its 10-year roadmap of the transformative capital management program, which was formulated in 2016 to execute the plans for various portfolio companies.”

“In the most recent instance, Adani family has raised USD 1.38 billion (Rs 11,330 crore) through stake sale in the three portfolio companies — Adani Enterprises Ltd, Adani Green Energy Ltd, and Adani Transmission Ltd,” the statement said.

In order to support growth and near-term commitments of both debt and equity for the portfolio firms over the next 12 to 18 months, this “ensures higher capital availability at the group level.”

Additionally, as the firm works to recover from claims of fraud made by a US short-seller, the three portfolio businesses have secured board permission for main issuances via a share sale to investors.

The group’s main business, Adani Enterprises Ltd, intends to raise Rs 12,500 crore via the sale of shares to investors, and Adani Transmission another Rs 8,500 crore. The company’s intention to collect Rs 12,300 crore is for renewable energy.

This occurs five months after the Hindenburg report caused Adani Enterprises to cancel a Rs 20,000 crore follow-on public offering (FPO).

The corporation gave members their money back even though the deal had been completely subscribed.

Upon publishing a damaging report in January accusing Adani Group of accounting fraud and stock price manipulation, US short-seller Hindenburg Research set off a stock market meltdown that, at its worst, had destroyed roughly USD 145 billion from the conglomerate’s market worth.

Adani Group has refuted all of Hindenburg’s accusations and is preparing a recovery plan that involves redefining its goals, abandoning acquisitions, paying off debt in advance to allay worries about its cash flows and borrowings, and slowing down the speed at which it invests in new projects.

Promoters have sold shares to renowned US-based global equity investment boutique GQG Partners since May in two tranches. The most recent took place earlier this month, when $1.38 billion was raised.

“A similar stake-sale by the family in March 2023 aggregating USD 1.87 billion (Rs 15,446 crore), resulted in full prepayment of margin-linked, share-backed financing and created flexibility in a rising rate environment to equitize debt capital as and when due,” according to the statement.

With a number of investor roadshows, early loan repayments, and proposals to slow down the rate of expenditure on new projects, the business has been attempting to regain market trust.

“Adani Group has raised over USD 9 billion in a short period of four years,” it said. “Adani Group, which started the capital transformation journey for its core infrastructure portfolio in 2019,” it said.

The program made it possible for long-only international investors to invest in the largest and fastest-growing infrastructure project in the world, where Adani Portfolio offers a one-stop play through its portfolio companies spread across the infrastructure spectrum from energy and utility to transport and logistics.

Adani Green Energy Limited (AGEL), Adani Transmission Limited (ATL), Adani Total Gas Limited (ATGL), and Adani Enterprises Limited (AEL) are just a few of the listed companies that have garnered investors.

Adani has attracted significant investments from companies like Qatar Investment Authority (QIA), TotalEnergies (TTE), International Holding Company (IHC), and GQG Partners (GQG), as well as its co-investors Australia Super, Goldman Sachs, University of Texas, Delaware Public Employees Retirement System, Master Trust Bank of Japan, and Missouri Education P

In February 2020, QIA invested USD 452 million in ATL, while in April 2019, TTE spent USD 3.3 billion in a joint venture with APSEZ, ATGL, and AGEL. In May of last year, IHC invested USD 2 billion in AEL, ATL, and AGEL. This year, GQG spent USD 3.19 billion in AEL, ATL, AGEL, and APSEZ.

The Adani Group’s commitment to the highest degree of governance and the trust and confidence shown by these significant international investors serve as evidence of the group’s companies’ underlying strength. The accomplishment of the investment program also shows that the organization is capable of raising money from businesses at every level and achieving its objectives, according to the statement.

AEL is one of the biggest business incubators in the world, with an emphasis on developing infrastructure companies. The airport and the green hydrogen industry are two of its major focuses. Green hydrogen will make it possible to decarbonize the industrial and transportation sectors and will aid India’s efforts to become independent of foreign oil.

With an operating portfolio of 8.1 GW, AGEL is both the biggest and the fastest-growing renewable power firm in India. By 2030, it plans to have 45 GW of renewable energy installed, making it the least expensive source of renewable energy.

ATL, which has a presence in electricity transmission and distribution and is putting more of an emphasis on smart metering, is the biggest private energy solutions provider in India. Smart meters are crucial instruments for the decarbonization of the energy industry since they will allow electricity distribution firms to effectively incorporate and plan renewable energy into power networks.