With the sharp recovery of Adani group shares in the last year, the conglomerate is starting roadshows this week to raise up to $4 billion (Rs 33,254 crore approx) as equity and refinance of older debt, say banking sources.
The roadshows will be held across all the big cities to inform investors about the group’s investment plans across renewable energy, petrochemicals, and infrastructure development. Officials of several sovereign funds from West Asia have already met the top officials of the group and were apprised of the work in progress at Navi Mumbai airport, which is scheduled for commissioning by this year-end.
On Monday, the board of electricity transmission firm Adani Energy Solutions approved plans to raise Rs 12,500 crore by way of qualified institutional placement or other permissible instruments. The board of Adani Enterprises will be meeting on Tuesday to consider a proposal for raising funds by way of issuance of equity shares or any other eligible securities, including a private placement, a qualified institutional placement, a preferential issue, or any other method.
When contacted, an Adani group spokesperson declined to comment.
The return of Adani group companies to the equity market comes after the group flagship Adani Enterprises withdrew its Rs 20,000 crore follow-on offer in January last year following a report by US-based short seller Hindenburg Research that resulted in a sharp fall in the group companies’ share prices. The group denied the allegations, and later an investigation by the market regulator, the Securities and Exchange Board of India (Sebi), did not find merit in the allegations.
The Adani group shares, which had crashed after the report by Hindenburg Research in January 2023, recovered after the promoters sold their shares in various group companies to GQG Partners and prepaid their loans. Various Adani group companies also prepaid their loans, thus convincing investors about their financial position.
Adani Enterprises shares closed at Rs 3,288 a share on Monday, while Adani Energy Solutions closed at Rs 1,104 a share.
Bankers said the group flagship has recently received approvals from Indian banks to raise up to Rs 17,000 crore for its petrochemical business and would require additional funds for its other infrastructure businesses, including airports. The flagship’s strategic business investments also include the green hydrogen ecosystem, airport management, data centres, roads, and primary industries like copper and petrochemicals—all of which have significant scope for value unlocking, the group told analysts after its fourth-quarter results.
In a report last week, Cantor Fitzgerald said India is one of the fastest-growing economies and is heavily investing across a range of end-markets to support continued economic growth, which, it says, bodes well for Adani Enterprises, as it touches nearly every aspect of life in India.
“From a bottoms-up point of view, we believe Adani’s valuation does not fully reflect what we believe the value of its current portfolio of established and incubating businesses to be. As these businesses continue to grow and mature, and as the demerging of businesses within Adani approaches, we believe this will result in shares more accurately reflecting what Adani’s sum-of-the-parts valuation is,” Cantor Fitzgerald analysts wrote in a note on May 22.
First Published: May 27 2024 | 6:21 PM IST