Billionaire Gautam Adani attracts investors with $1.38 billion stake sale
Gautam Adani, the billionaire chairman of the Adani Group, has successfully raised $1.38 billion (₹11,330 crore) through stock sales in three of his group companies. This recent round of fundraising brings the total amount raised over the past four years to an impressive $9 billion. Adani Group continues to generate significant interest from a wide range of investors.
Capital raised to support growth and debt commitments
The funds raised through the stake sale will be utilized to fulfill Adani Group’s 10-year roadmap, as well as to support the growth and debt commitments of its portfolio companies. Adani Enterprises Ltd., Adani Green Energy Ltd., and Adani Transmission Ltd. are the three portfolio companies that witnessed the stake sale, ensuring higher capital availability for the group’s expansion plans.
Adani Group’s commitment to transformative capital management
In a statement, Adani Group emphasized its commitment to raising capital in order to execute its 10-year transformative capital management program, which was formulated in 2016. This program encompasses the strategic plans for various portfolio companies, ensuring their long-term success and growth.
The recent stake sale of $1.38 billion (₹11,330 crore) in Adani Enterprises Ltd., Adani Green Energy Ltd., and Adani Transmission Ltd. further strengthens the group’s capital position. This enhanced capital availability will enable the portfolio companies to meet their growth objectives and fulfill their debt and equity commitments over the next 12-18 months.
Recovery efforts amidst allegations of fraud
Adani Group’s three portfolio companies have obtained board approval for major issuances through a share sale to investors. These measures are part of the firm’s ongoing efforts to recover from allegations of fraud made by a US short-seller. It comes after Adani Enterprises canceled a ₹20,000 crore follow-on public offering (FPO) due to a damaging report released by Hindenburg Research in January.
The Hindenburg report, accusing Adani Group of accounting fraud and stock price manipulation, had a significant impact on the conglomerate’s market value, causing a stock market meltdown. Adani Group, however, has refuted all allegations and is working on a strategic plan to regain confidence in the market. This plan involves revising ambitions, discontinuing acquisitions, pre-paying debts, and reducing spending on new projects.
Investor confidence and successful capital raising
Despite the challenges faced, Adani Group has successfully raised over $9 billion in the past four years for its core infrastructure portfolio. The group’s listed entities, including Adani Ports and Special Economic Zone Limited (APSEZ), Adani Green Energy Limited (AGEL), Adani Transmission Limited (ATL), Adani Total Gas Limited (ATGL), and Adani Enterprises Limited (AEL), have attracted investments from prominent entities such as Qatar Investment Authority (QIA), TotalEnergies (TTE), International Holding Company (IHC), and GQG Partners, along with several other co-investors.
These investments not only reflect the confidence of global investors in the strength of Adani Group’s businesses but also highlight the group’s commitment to high governance standards. Adani Group’s subsidiaries, AEL, AGEL, and ATL, are actively engaged in infrastructure sectors including airports, green hydrogen, renewable power generation, power transmission, distribution, and smart metering. These businesses are playing a vital role in decarbonizing industries, achieving energy self-sufficiency, and integrating renewable energy into power grids for a sustainable future.
Gautam Adani’s successful stake sale of $1.38 billion in three of his group companies marks another significant milestone in Adani Group’s capital-raising journey. The funds raised will not only support the group’s 10-year roadmap but also contribute to the growth and debt commitments of the portfolio companies. Despite recent challenges and allegations, Adani Group continues to attract global investors, demonstrating their confidence in the group’s businesses and its commitment to sustainability and high governance standards.