Adani to raise Rs 21,000 crore from share sale in two group companies


NEW DELHI: Billionaire Gautam Adani’s group will raise 21,000 crore rupees (over US$2.5 billion) by selling stakes in two group companies. It’s the boldest comeback strategy after the ports-to-energy giant was rocked by allegations of fraud by a US short seller.
Adani Enterprises Ltd, the group’s flagship company, plans to raise Rs. 12,500 crore as an electricity transmission company Adani transmission another 8,500 crore rupees, the companies said in their stock filings.
The renewable energy department board, Adani Green Energy Ltd., was also due to meet for a fundraiser on Saturday, but the meeting has been postponed to May 24.
Funds are raised by issuing shares to qualified institutional buyers. Sources familiar with the matter said investors in Europe and the Middle East have shown keen interest.
In an IPO filing, Adani Enterprises said its board on Saturday “authorized the raising of funds through the issuance of … equity shares with a par value of Rs. 1 each in the company and/or other eligible securities or a combination thereof, e.g. an aggregate amount not exceeding Rs. 12,500 Crore Rupees or equivalent amount thereof by way of a Qualifying Institutional Placement (QIP) or other acceptable form under applicable laws.”
Adani Transmission said in a separate filing that its board had “authorised the raising of funds through the issuance of such number of shares in the company with a par value of Rs. 10 each and/or other eligible securities or a combination thereof for an aggregate amount”. not more than 8,500 crore rupees or equivalent amount thereof by QIP or other acceptable form under applicable laws.”
This comes three months after Adani Enterprises was forced to abandon a follow-up offering (FPO) worth Rs 20,000 crore in the wake of the Hindenburg report.
The offer was fully subscribed, but the company returned the money to subscribers. According to the sources, the company’s shares, which were offered in the FPO in the price range of Rs.3,112-3,276, are now available for sale at Rs.1,964 (at Friday’s closing price).
US short seller Hindenburg research published a damning report in January alleging accounting fraud and stock price manipulation at Adani Group, which led to a stock market crash that wiped out the conglomerate’s market value by around $145 billion from its lowest point.
The Adani Group has denied all of Hindenburg’s allegations and is planning a comeback strategy. The group has reformulated its ambitions and prepaid some loans to reassure investors.
In March, the promoters sold shares valued at Rs.15,446 crore in four group companies to leading global equity investment boutique GQG Partners, based in the US.
The company is attempting to regain market confidence with a series of investor roadshows, early debt repayments and plans to curb spending on new projects.
The funds Adani Group plans to raise will be the conglomerate’s largest borrowing since the Jan. 24 Hindenburg report. The money raised will be used to fund the group’s expansion projects.

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