MUMBAI: Two companies controlled by billionaire Gautam Adani will collectively raise 21,000 crore through share sales less than four months after a damning report from a short seller plunged his empire into crisis, sending share prices down and shaking investor confidence, Reeba reports Zachariah .
Adani’s flagship company Adani Enterprises will raise 12,500 crore rupees through the qualified institutional brokerage (QIP) route, while power distributor Adani Transmission will collect 8,500 crore rupees via the same mode. His renewable energy company, Adani Green Energy, is also planning to raise funds and had a board meeting scheduled for Saturday but postponed to May 24. While Adani Enterprises and Adani Transmission did not disclose the purpose of their fundraising, Adani Group observers said the money will be used to improve their balance sheets. The two will need shareholder nods to continue their fundraising programs.
Adani’s QIP push becomes the key test for investors after February’s scrapping of FPO
This will be Adani’s second fundraiser after he and his family sold stakes in four companies – Adani Enterprises, Adani Transmission, Adani Green Energy and Adani Ports & SEZ – worth 15,446 crore to Australian-listed US asset manager GQG in March have partners.
It will also be a crucial test for investors in Adani’s business empire after he called off the flagship company’s Rs 20,000 crore rupees further public offering (FPO) in February after short seller Hindenburg Research issued a report accusing its conglomerate of widespread fraud.
Unlike an FPO, which is a public offering, a QIP is a private placement, in which a company issues shares to sophisticated institutional investors rather than retail investors, and can be completed more quickly, J Sagar Associates‘ Partners (Capital Markets) Art Mookerjee. In addition, the project promoters’ share in the company’s equity is diluted.
QIP will also help a company expand its investor base, Mookerjee said.
Adani and his family directly and indirectly own 69% of Adani Enterprises while owning approximately 72% of Adani Transmission.
Shares of both companies closed at 1,965 rupees and 885 rupees respectively on the BSE on Friday.
Though shares of all 10 listed Adani companies within the group have risen in recent months, they are still well below the highs they had reached before Jan. 24, a day before the Hindenburg report was released.
Adani’s flagship company Adani Enterprises will raise 12,500 crore rupees through the qualified institutional brokerage (QIP) route, while power distributor Adani Transmission will collect 8,500 crore rupees via the same mode. His renewable energy company, Adani Green Energy, is also planning to raise funds and had a board meeting scheduled for Saturday but postponed to May 24. While Adani Enterprises and Adani Transmission did not disclose the purpose of their fundraising, Adani Group observers said the money will be used to improve their balance sheets. The two will need shareholder nods to continue their fundraising programs.
Adani’s QIP push becomes the key test for investors after February’s scrapping of FPO
This will be Adani’s second fundraiser after he and his family sold stakes in four companies – Adani Enterprises, Adani Transmission, Adani Green Energy and Adani Ports & SEZ – worth 15,446 crore to Australian-listed US asset manager GQG in March have partners.
It will also be a crucial test for investors in Adani’s business empire after he called off the flagship company’s Rs 20,000 crore rupees further public offering (FPO) in February after short seller Hindenburg Research issued a report accusing its conglomerate of widespread fraud.
Unlike an FPO, which is a public offering, a QIP is a private placement, in which a company issues shares to sophisticated institutional investors rather than retail investors, and can be completed more quickly, J Sagar Associates‘ Partners (Capital Markets) Art Mookerjee. In addition, the project promoters’ share in the company’s equity is diluted.
QIP will also help a company expand its investor base, Mookerjee said.
Adani and his family directly and indirectly own 69% of Adani Enterprises while owning approximately 72% of Adani Transmission.
Shares of both companies closed at 1,965 rupees and 885 rupees respectively on the BSE on Friday.
Though shares of all 10 listed Adani companies within the group have risen in recent months, they are still well below the highs they had reached before Jan. 24, a day before the Hindenburg report was released.
