Billionaire Adani’s firms weigh raising up to Rs 41,000 cr

By P R Sanjai and Baiju Kalesh

Three companies controlled by billionaire Gautam Adani are considering a fundraising that may draw as much as Rs 41,000 crore ($5 billion), according to people familiar with the matter, in a pivotal test of investor confidence in the tycoon’s empire less than four months after a scathing short seller report plunged it into crisis.

Adani Enterprises Ltd., the flagship, as well as Adani Green Energy Ltd. and Adani Transmission Ltd., may raise between Rs 25,000 crore ($3 billion) and Rs 41,000 crore ($5 billion) for a war chest to bolster the businesses, the people said, asking not to be identified as the information is private.

The boards of the three firms are meeting on Saturday to consider raising funds via the sale of shares or other securities, according to exchange filings late Wednesday. They didn’t disclose how much they intend to raise or who they’re working with for potential deals. The companies’ boards usually approve fundraising plans to enable the management to quickly tap markets when opportunities arise.

Also read: Adani Enterprises to weigh stock sale months after short-seller turmoil

The plans are still being discussed and there is no certainty that the companies will announce a sum they are looking to raise after the Saturday board meetings, the people said. A representative for the Adani Group didn’t to comment on the fundraising details.

Any move by the Adani Group companies to tap a broader group of investors for funds could backfire, if the market isn’t convinced that the cloud hanging over the stocks has lifted — or find the prices still too high. Despite the coal-to-cement conglomerate denying fraud allegations made by Hindenburg Research in January, the broadside triggered a weeks-long stock rout that wiped out more than Rs 8.21 lakh crore ($100 billion) of market value, forcing the billionaire to scrap a Rs 19,700 crore ($2.4 billion) share sale by his flagship firm priced at pre-attack levels.

Damage Repair

The Adani family in early March raised about Rs 15,600 core ($1.9 billion) selling shares in four firms to US investment firm GQG Partners, held investor roadshows and prepaid debt as they raced to bolster confidence and repair the damage from short seller’s accusations.

Adani company board meetings every year include proposing enabling resolutions to raise capital, which is part of their annual financial planning, the people said.

An analysis by Bloomberg of exchange filings shows Adani Enterprises and Adani Transmission have sought board approval for fundraising every year in April or May since at least 2019. Adani Green Energy secured such permission every year except in 2021, the data shows. The three firms raised almost Rs 16,400 crore ($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 attack and the ensuing market rout. A successful share sale would go a long way toward cementing Adani’s recovery from the crisis, though much would also depend on the terms of the deal and the profile of investors.

The stock meltdown earlier this year also cooled Adani companies’ heated valuations. Added to the rout, a further discount could make them more attractive to investors.

Adani Enterprises posted a 138 per cent jump in its latest quarterly profit while revenue rose 26 per cent, boosted partly by the mining and airport businesses, and gross debt shrank by 6.5 per cent. Adani Green’s profit more than quadrupled for the March quarter and its operational capacity surged by almost half to more than 8 gigawatts. It is targeting a capacity of 45 gigawatts by 2030.

Adani Transmission hasn’t announced the March quarter earnings yet.