After Sellout In Two Adani Energy Stocks; Abu Dhabi's IHC Buy's Stake In Group's Adani Enterprises

Abu Dhabi-based leading investor, International Holding Company (IHC) has shown a mixed interest in Adani Group-backed listed stocks. After selling out stakes in two of Adani's energy stocks last week, IHC has shown love to the Group's flagship firm Adani Enterprises.

As per the latest data, IHC has purchased an additional 1,15,96,181 equity shares or 1.02% stake in Adani Enterprises through its subsidiary Green Vitality Rsc, in the open market, during the first quarter of FY24. However, the transaction value could not be known immediately.

But based on the closing price of Rs 2,412.15 apiece on BSE September 29, the 1.02% stake bought is approximately worth Rs 2,805 crore.

On Tuesday, currently, Adani Enterprises shares are trading on a bearish note. At the time of writing, Adani Enterprises performed at Rs 2,392.20 apiece, down by Rs 19.95 or 0.83%. The stock ranged from an intraday high of Rs 2,424.80 to an intraday low of Rs 2,385.10 apiece.

Nevertheless, Adani Enterprises continues to be the largest holding of Adani Group with a market cap of nearly Rs 2.73 lakh crore.

IHC has liked Adani Enterprises for quite some time now. It first showed interest in the company in March last year, when it purchased 3.53% or 4,01,91,038 equity shares aggregating to Rs 7,700 crore through its other subsidiary, Green Enterprises Investment Holding Rsc Limited.

Not only that IHC eagerly participated in Adani Enterprises-led Rs 20,000 crore follow-on public offer which was the Indian market's largest FPO, and launched in late January this year.

In Adani Enterprises FPO, IHC had planned to infuse AED 1.4 billion ($400 million) through Green Transmission Investment Holding RSC. That time, in January, Syed Basar Shueb, Chief Executive Officer, IHC had said that they see Adani Enterprises a strong potential for growth from a long-term perspective and adding value to its shareholders.

IHC showed confidence in Adani Enterprises when its group was battling a US-based short seller Hindenburg's allegations of brazen stock manipulation.

However, the port-to-energy empire's chief Gautam Adani called off the Rs 20,000 crore FPO, just a day after it was fully subscribed on January 31. Gautam cited unprecedented market performance, and steep fluctuations in their stock prices as the reason to return the proceeds from FPO to investors because the Group felt it was not morally correct to go ahead with the public offer in such circumstances.

Adani Group shares were battered, leading to billions of dollars of market rout after Hindenburg's controversial report on the conglomerate on January 24, 2023.

Eventually, what could have been IHC's second investment deal in Adani Group through the FPO could not be completed.

In 2022, IHC invested $2 billion in three green-focused companies of the Adani Group, including Adani Green Energy, Adani Transmission, and Adani Enterprises.

But with the latest stake purchase in Adani Enterprises, IHC's shareholding now stands at 5,17,87,219 equity shares or 4.55% in the company.

Interestingly, while Adani Enterprises stays in IHC's portfolio, the UAE-based company plans to sell stakes in Adani's energy stocks namely Adani Green Energy and Adani Transmission now known as Adani Energy Solutions.

Last week, in its exchange filing, IHC said, "Under the overall portfolio rebalance strategy of IHC, Green Energy Investment Holding RSC, and Green Transmission Investment Holding, subsidiaries of IHC Capital Holding LLC, have entered into a definitive agreement with a buyer to dispose of its FDI investment in Adani Green Energy and Adani Transmission, respectively." Although, IHC did not reveal the name of the buyer.

Adani Green shares are down by 1%, while Adani Energy shares are trading volatile on Tuesday.