October 3, 2024
New Delhi, India
Adani Enterprises
Adani Enterprises Ltd., the flagship company of the Adani Group, is preparing to raise $1.3 billion through a qualified institutional placement (QIP). The share sale is expected to commence as early as the week of October 7, 2024, according to a Bloomberg report citing unnamed sources.
Key Details of the Fundraising:
- QIP Amount: $1.3 billion (~₹16,600 crore)
- Start Date: Expected the week of October 7, 2024
- Board Approval: Received in May 2024 for fundraising of up to ₹166 billion ($2 billion) through various methods, including institutional share sales.
- Greenshoe Option: The terms of the sale may include a greenshoe option, allowing for additional shares to be sold. Details will likely be finalized by the board by the end of this week.
Institutional Interest:
There is reportedly strong interest from domestic institutional investors in the equity issue, which signals confidence in Adani Enterprises despite past challenges.
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Adani’s Market Performance:
Adani Enterprises’ shares have risen 33% over the past 12 months, indicating a recovery after the company faced severe market pressure earlier in 2023. This came following accusations from Hindenburg Research of stock manipulation and accounting fraud, which led to a stock market rout and wiped off over $150 billion in market value at one point. However, the Adani Group has consistently denied these allegations.
QIP and Market Context:
Qualified institutional placements (QIP) allow listed companies to raise capital from qualified institutional buyers (QIBs) by issuing shares or other equity convertible securities. Adani Enterprises is capitalizing on strong equity markets to boost its balance sheet and finance future expansions.
Notably, 2024 has been a significant year for QIPs in India, with 55 companies raising ₹58,400 crore in the first eight months, the second-highest after 2020. The QIP wave is part of a broader movement within India’s corporate sector to tap into vibrant equity markets.
Financial Performance:
Adani Enterprises reported impressive growth for the June quarter (Q1 FY25):
- Net Profit: ₹1,458 crore, up 116% from ₹675 crore in the same period a year earlier.
- The new energy business unit, Adani New Industries (ANIL), saw EBITDA surge by 3.6x to ₹1,642 crore, driven by growth in solar manufacturing and wind turbine businesses.
Advisors:
ICICI Securities, Jefferies Financial Group, and SBI Capital Markets are reportedly advising Adani Enterprises on the share sale, helping the company navigate its return to the public equity markets after the short-seller debacle in early 2023.
Disclaimer:
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