The Adani group is set to tap the securities market — in a test of investor confidence in the conglomerate, which suffered a stock rout following the Hindenburg report even as it received some respite after US-based boutique investor GQG ploughed back funds into group companies.
The boards of three group companies — flagship Adani Enterprises, Adani Transmission and Adani Energy — are meeting on May 13 to discuss funding options.
This is the first time the boards of the listed companies are meeting to mobilise funds, since the release of the Hindenburg report in January.
With the report going public, Adani was forced to shelve the follow-on public offer of flagship Adani Enterprises, which opened on January 27 and closed on January 31, the last time the company tapped the markets.
While the company sailed through the FPO, the steep fall in its share price forced Adani to withdraw the offer and return money to investors.
The three companies on Thursday did not disclose the amount they plan to raise, though markets are speculating they could raise anywhere between $4 billion and $5 billion.
“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 of equity shares or any other eligible securities through permissible modes, including but not limited to a private placement, a qualified institution placement, preferential issue or any other method or combination of methods,” the company said in a communication to the stock exchanges.
Adani Green Energy Ltd and Adani Transmission also came out with filings with similar wording.
The announcements fired up all three stocks — while Adani Enterprises gained nearly 5 per cent or Rs 92.50 to end at Rs 1,984.60 on the BSE, Adani Transmission settled 3.15 per cent higher at Rs 917 and Adani Green Energy was up 1.27 per cent at Rs 913.70.
Market circles believe GQG Partners and Abu Dhabi’s International Holding Company will put money in the companies.
The Abu Dhabi fund had committed $400 million or Rs 3,200 crore to the botched FPO of Adani Enterprises.
GQG Partners had invested nearly $1.9 billion in group firms Adani Enterprises, Adani Green Energy, Adani Transmission and Adani Ports & SEZ. GQG founder Rajiv Jain had said they could ramp up their exposure in the group.
Speaking to The Telegraph, Arun Kejriwal, director of investment advisory firm Kris, said Adani had the option to raise funds through QIP (qualified institutional placement), and if it chooses to raise money from the public, market sentiment and pricing will play a key role.
He said the Adani group stocks were ruling far below the prices in their heydays before the Hindenburg report, though they have recovered some of their losses.
However, stability has returned to the counters of late. ``You will now not see them falling by more than 10 per cent. Their results have also been largely positive, suggesting that they are on the growth path,’’ he said.
An analyst with a domestic brokerage added any major rally could be a limited one because of the ongoing Sebi probe into the group even as the Supreme Court is likely to take up a report on the health of the capital markets.
After the Hindenburg report, the group has been focussing on reducing share-backed debt, addressing one majorinvestor concern. The proposed fundraising by the companies could be used to again bring down debt at the company level or for business growth.
Meanwhile, Adani Ports and Special Economic Zone announced the successful early settlement of notes tendered by its bondholders following its offer to buy back debt.
The company said in a regulatory filing that it has paid $127.4 million and an accrued interest of $9.9375 per $1,000, of the notes.
Against its offer to buyback debt of nearly $130 million, the company had received bids up to $412.7 million.
