Indian billionaire Gautam Adani’s conglomerate, the Adani Group, is embarking on an audacious comeback strategy following a challenging period prompted by a scathing report from a US short seller.
The group plans to raise approximately $3.5 billion through an equity share sale to institutional investors, as per a PTI report. The funds raised will be allocated towards the group’s capital expenditure requirements. With boards of two flagship firms — Adani Enterprises Ltd and Adani Transmission Ltd — already approving share sales, Adani Green Energy Ltd is expected to follow suit.
Adani Enterprises Ltd and Adani Transmission Ltd have already received board approvals for raising up to Rs 21,000 crore (over $2.5 billion) through share sales to qualified institutional investors. Furthermore, the Adani Green Energy Ltd board will likely approve a fundraising plan of up to $1 billion in the coming weeks, media reports said.
The fundraising process is expected to conclude within the second quarter of the current fiscal year — July to September 2023. Investors from Europe and the Middle East have displayed strong interest, while both existing and new investors are anticipated to participate.
GQG Partners, a prominent investor that injected $1.87 billion into four Adani group companies in March, is expected to remain engaged in the conglomerate’s growth story. The group’s recent roadshows abroad, targeting a diverse range of financial institutions and investors, have played a pivotal role in solidifying this investor trust.
The decision to raise funds follows Adani Enterprises’ decision to cancel a Rs 20,000 crore follow-on public offering (FPO) three months ago, triggered by the Hindenburg report.
The US short-seller, Hindenburg Research, had alleged accounting fraud and stock price manipulation within the Adani Group, leading to a significant decline in the conglomerate’s market value.
Adani Group has categorically denied all allegations and has since embarked on a comprehensive recovery strategy. To reassure investors, the group has realigned its ambitions and repaid substantial amounts of debt. Additionally, Adani promoters successfully sold stakes worth Rs 15,446 crore to GQG Partners, further bolstering market confidence.
The Adani Group’s latest fundraising endeavor represents the largest borrowing since the release of the Hindenburg report. By securing substantial funds, the conglomerate aims to fuel its expansion projects and reinforcing its position as a leading player in sectors ranging from ports to energy.
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