Adani Enterprises Limited, Flagship, Also Adani Green Energy Ltd. and Adani Transmission Ltd., could raise between $3 billion and $5 billion for a war chest to consolidate businesses, said the people, asking not to be identified because the information is private.
The boards of the three firms are meeting on Saturday to consider raising funds through sale of shares or other securities, according to exchange filings late on Wednesday. They did not disclose how much they are looking to raise or who they are working with for potential deals. Companies’ boards usually approve fundraising plans so that management can quickly tap the markets when opportunities arise.
The plans are still being discussed and there is no certainty that the companies will announce an amount after Saturday’s board meeting, the people said. a representative for Adani Group did not comment on fundraising details.
Any move by Adani group companies to tap a wider set of investors for funds could backfire if the market is not convinced that the clouds over the shares have lifted – or the prices are still too high. Despite denying allegations of fraud by the coal-to-cement group Hindenburg Research In January, Broadside triggered a week-long stock rout that wiped out more than $100 billion in market value, forcing the billionaire to pare a $2.4 billion share sale by his flagship firm to pre-attack levels. Had to happen
damage repair
The Adani family raised about $1.9 billion by selling shares in the four firms to US investment firm GQG Partners in early March, holding investor roadshows and prepaid loans as they look to boost confidence and repair losses from short seller allegations. They ran
The people said Adani company board meetings every year include the proposal of enabling proposals to raise capital, which is part of their annual financial plan.
Analysis of exchange filings by Bloomberg shows that Adani Enterprises and Adani Transmission have sought board approval for fundraising in April or May every year since at least 2019. green energy Data shows that every year except 2021 secured such permission. The three firms raised about $2 billion from Abu Dhabi-based International Holding Company PJSC in April last year.
But the current round of fundraising, once finalized, will be the first for Adani Companies After the Hindenburg assault and subsequent Bazar defeat. A successful share sale would go a long way towards bailing Adani out, though a lot would depend on the terms of the deal and the profile of the investors.
The stock meltdown earlier this year also cooled the hot valuations of Adani companies. Plus, a further discount could make them more attractive to investors.
Adani Enterprises reported a 138% jump in profit in its latest quarter, while revenue rose 26%, partly boosted by mining and airport businesses, and gross debt decreased by 6.5%. Adani Green’s profit more than quadrupled for the March quarter and its operating capacity nearly halved to over 8 GW. It is targeting a capacity of 45 GW by 2030.
Adani Transmission is yet to announce its March quarter earnings.