Flagship Adani firm to raise 200 billion rupees via new share sale

ADANI Enterprises, the flagship company of ports-to-energy conglomerate Adani Group, said it will raise 200 billion Indian rupees (S$3.4 billion) through India’s largest follow-on public offering of new shares.

The proposed fund raise comes as the group led by Gautam Adani, the world’s third richest person, aggressively expands into an slew of sectors including cement and healthcare, amid some concerns about its elevated debt levels and large promoter shareholding.

The share offering would increase the company’s public float from the current 27.4 per cent level. Rival Reliance Industries’ public float stands at around 49 per cent.

“Adani needs capital at the holding company level. It is the flagship company. They need money for a lot of the new initiatives they are seeding, acquisitions and for new projects,” said a source with direct knowledge of the transaction.

The group has made acquisitions worth US$13.8 billion so far this year, as per Dealogic data, its highest ever in a year and more than double the previous year.

Adani, whose empire spans gas and power projects as well as a ports and logistics business, said in September his company will invest more than US$100 billion over the next decade, with 70 per cent earmarked for the energy transition space.

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The company plans to file a draft prospectus before Dec 31 and raise the funds before March 31, but it will depend on market conditions, the person added.

Debt research firm CreditSights, part of the Fitch Group, had previously said Adani will continue to seek strategic equity partners after flagging concerns over the group’s elevated debt levels.

Adani Enterprises stock has jumped nearly 130 per cent this year, up to last close, vastly outperforming a 6.5 per cent rise in the blue-chip Nifty 50 index.

FPOs are done by already listed companies to diversify their equity shareholding. The previous largest FPO was a 150 billion-rupee share sale in 2020 by Yes Bank. REUTERS