Adani Group To Raise $3.5 Billion From Equity Share Sale In Three Group Firms

Billionaire Gautam Adani's conglomerate is planning a bold comeback strategy by raising approximately USD 3 billion through an equity share sale to institutional investors. 

The move came after the group, which operates in various sectors from ports to energy, faced criticism from Hindenburg Research, a US short seller. Adani Enterprises and Adani Transmission have already obtained board approvals to raise up to Rs 21,000 crore (over USD 2.5 billion) through share sales to qualified institutional investors. 

Adani Green Energy is expected to seek board approval to raise up to USD 1 billion in the coming weeks. 

Following the board approvals, shareholder approval will be sought by Adani Enterprises and Adani Transmission. The board of Adani Green Energy is anticipated to meet in June to approve the fundraising. 

The entire fundraising of USD 3.5 billion, intended to fulfil the capital expenditure needs of the group, is likely to be completed in the second quarter of the current fiscal year (July to September). Qualified institutional buyers will be offered shares to raise the funds. 

According to the media reports citing sources, investors from Europe and the Middle East have shown strong interest in participating in the fundraising. Existing investors are expected to subscribe to the offer, while new investors may also join in. GQG Partners, which invested USD 1.87 billion in four Adani group companies in March, may also be involved, highlighting the investor's ongoing interest in the conglomerate. Investors continue to believe in the growth prospects of Adani and have expressed interest in further investments. 

The fundraising plans were developed after extensive roadshows targeting financial institutions and other investors abroad. This initiative comes three months after Adani Enterprises had to cancel a Rs 20,000 crore follow-on public offering (FPO) due to the Hindenburg report. Despite the subscription being full, the company returned the funds to subscribers. The stock price, which was offered at a range of Rs 3,112 to Rs 3,276 during the FPO, is currently trading at Rs 2,494.25 (as of Wednesday's closing price). 

In January, US short-seller Hindenburg Research released a report alleging accounting fraud and stock price manipulation within the Adani Group. This led to a significant decline in the conglomerate's market value, wiping out approximately USD 145 billion at its lowest point. Adani Group has denied all allegations and is now focusing on rebuilding investor confidence. The group has adjusted its ambitions and repaid some loans as part of this effort. 

In March, the promoters sold stakes worth Rs 15,446 crore in four group companies to GQG Partners, a leading US-based global equity investment boutique. The group has been undertaking investor roadshows, repaying debts ahead of schedule, and scaling back spending on new projects to regain market confidence. 

The funds raised by the Adani Group through this share sale will be the largest borrowing since the Hindenburg report was released on 24 January. The funds will be utilised to support the group's expansion projects.