Adani Group's Three Companies Weigh Raising Up To Rs 40,000 Crore

Three companies owned by billionaire Gautam Adani are considering a fundraising effort that could raise up to $5 billion. This is a critical test of investor confidence in the tycoon's empire less than four months after a damning short seller report sent it into crisis, according to people familiar with the matter.

The flagship company, Adani Enterprises Ltd., along with Adani Green Energy Ltd. and Adani Transmission Ltd., may collect between $3 billion and $5 billion for a war fund to support the businesses, the sources said, asking not to be identified because the information is confidential.

The three companies' boards will meet on Saturday to discuss whether to raise money through the sale of shares or other securities, according to exchange papers made late on Wednesday.

IHC's representative told Bloomberg that the Abu Dhabi-based company, which has about $2 billion invested in Adani firms, has no plans to participate in any prospective share sales.

''A meeting of the board of directors of Adani Enterprises Ltd will be held on Saturday, May 13, 2023, at Ahmedabad, inter alia, to consider and approve the proposal of the raising of funds by way of issuance equity shares or any other eligible securities through permissible modes, including but not limited to a private placement, a qualified institutions placement, preferential issue, or any other method or combination of methods,'' the Adani flagship said in the filing.

This occurs three months after the Hindenburg report caused Adani Enterprises Ltd. to cancel a Rs 20,000 crore follow-on public offering (FPO).

The corporation gave subscribers their money back even though the deal had been fully subscribed.
The firm stock is now available for purchase for Rs 1,984 (at Thursday's closing price), down from the FPO price range of Rs 3,112 to Rs 3,276 per share.

The renewable energy company of the firm, Adani Green Energy Ltd, as well as Adani Transmission also filed a document with similar language.

The Gautam Adani-led Adani Group may be aiming to raise between $2 billion and $2.5 billion, according to news agency PTI, with investors in Europe and the Middle East reportedly showing a lot of interest.

When US short-seller Hindenburg Research in January published a damning research claiming accounting fraud and stock price manipulation at the Adani group, it set off a stock market meltdown that, at its worst, had destroyed roughly USD 145 billion from the conglomerate's market worth.

Adani Group has refuted all of Hindenburg's accusations and is preparing a return plan. Since the news, the value of Adani stocks has dropped by more than $110 billion.

The ports-to-power firm has revised its goals and paid off some loans to reassure investors.
In March, the promoters sold shares in four group companies to renowned US-based global equity investment boutique GQG Partners for a total of Rs 15,446 crore.

The company has been making efforts to regain market trust by holding a number of investor roadshows, making early debt repayments, and announcing plans to slow down the rate at which it invests in new projects.

Since the publication of the Hindenburg report on January 24, the Adani Group has borrowed a total of $1 billion. The funds raised are going to be used to support the group's expansion plans.