Adani Enterprises Ltd., the flagship, and Adani Green Energy Ltd. and Adani Transmission Ltd. could raise between $3 billion and $5 billion for a war chest to bolster the companies, the people said, asking not to be identified as such. Information is private.
The boards of the three companies are meeting Saturday to consider raising funds by selling shares or other securities, stock documents revealed late Wednesday. They did not disclose how much they plan to raise or who they are working with on potential deals. Company boards typically approve fundraising plans so management can quickly tap markets when opportunities arise.
The plans are still being discussed and there is no certainty the companies will announce the amount they intend to raise after Saturday’s board meetings, the people said. A representative of the Adani Group did not comment on the details of the fundraiser.
Any attempt by Adani Group companies to attract funds from a broader group of investors could backfire if the market isn’t convinced the cloud over shares has cleared — or still finds prices too high. Although the coal-cement company rejects the allegations of fraud it has made Hindenburg research In January, the broadside sparked a week-long stock price that wiped out more than $100 billion in market value and forced the billionaire to abandon a $2.4 billion share sale at his flagship company’s price before the attack.
The Adani family raised about $1.9 billion in early March by selling stakes in four companies to U.S. investment firm GQG Partners, hosting investor roadshows and prepaying debt to boost confidence and soothe the damage to make amends for the allegations of the short sellers.
Each year, Adani company’s board meetings propose resolutions to raise capital, which are part of annual financial planning, the people said.
Analysis of IPO filings by Bloomberg shows that Adani Enterprises and Adani Transmission have sought board approval for fundraising in April or May of each year since at least 2019. Adani Green Energy has obtained this permit every year except 2021, the data shows. The three firms raised nearly $2 billion from Abu Dhabi-based international holding company PJSC in April last year.
But the current round of fundraising, once completed, will be the first Adani company after the Hindenburg attack and subsequent market defeat. A successful share sale would go a long way towards solidifying Adani’s recovery from the crisis, although much would also depend on the terms of the deal and the profile of the investors.
The stock crash earlier this year also cooled the inflated valuations of Adani companies. Along with the drop in price, a further discount could make them more attractive to investors.
Adani Enterprises saw its most recent quarterly profit rise 138%, while revenue rose 26%, driven in part by its mining and airport businesses, and gross debt fell 6.5%. Adani Green’s profit more than quadrupled in the March quarter and its operating capacity increased by almost half to over 8 gigawatts. A capacity of 45 gigawatts is targeted by 2030.
Adani Transmission has not yet announced its March quarter results.