Adani Enterprises Ltd eyes mega equity float
Adani Enterprises Ltd (AEL) on Friday said it would raise Rs 20,000 crore through the sale of shares to investors. The proceeds are likely to be utilised towards pruning debt and funding its massive expansion plans.
The flagship company of the Adani group — which has incubated various businesses — told investors after its Q2 results it had a gross debt of Rs 40,024 crore and a net debt of Rs 33,517 crore at the end of September. External debt to equity stands at 0.93 against 1.06 at the and of March 31.
In a stock exchange filing, AEL said its board met on Friday and approved the ``raising of funds by way of a further public offering through a fresh issue of equity shares by the company aggregating up to Rs 20,000 crore’’.
The company said it would seek shareholder approval through a postal ballot, which is expected to offer details on the use of the funds.
Adani group chief Gautam Adani had earlier said they were looking to increase the free float in the company. Promoters hold 72.63 per cent in Adani Enterprises, while insurance companies and foreign portfolio investors hold almost 20 per cent, with just 7-8 per cent with the public.
AEL has a market cap of almost Rs 4.45 lakh crore, and the shares have given returns of more than 121 per cent over the last one year. Observers said the response of institutional investors to the follow-on offering will be crucial amid expensive valuations and concerns over debt.
A Bloomberg report said that Adani could raise at least $5 billion (around Rs 41,100 crore, including the follow-on offer) that will also include a buy-in from big investment funds in West Asia and Canada. The report said the Adanis are targeting global sovereign and pension funds including Mubadala Investment, Abu Dhabi Investment Authority and the Canada Pension Plan Investment Board.
AEL had posted a net profit of Rs 461 crore for the second quarter ended September 30, marking a gain of 117 per cent over Rs 212 crore in the same period a year ago.
Revenues during this period shot up by 183 per cent to Rs 38,441 crore. The incubating businesses generated revenues of Rs 3,202 crore.
The Adani group is now present in segments such as ports, airports, roads, power, renewable energy, electricity transmission, gas distribution, FMCG and cement.
■ Adani Enterprises to raise Rs 20,000 crore through follow-on offer
■ The flagship company of the group has Rs 33,517cr net debt at the end of Q2
■ Public shareholding in Adani Enterprises stands at around 8%
■ Shares have given 121% returns in a year