Adani upsizes share sale to US$1.6 billion on strong investor demand

[MUMBAI] Adani Enterprises increased the size of a share sale to institutional investors to 150 billion rupees (US$1.6 billion) from 100 billion rupees after receiving strong demand from global investors as well as domestic funds.

The offering by the flagship company of Asia’s richest person, Gautam Adani, was subscribed 1.5 times on Friday (Jul 3), according to terms of the deal seen by Bloomberg.

The investors include some of the world’s largest investment management firms, with The Capital Group, Goldman Sachs Group, Vanguard Group and BlackRock participating alongside domestic mutual funds including SBI Funds Management, ICICI Prudential Asset Management and HDFC Asset Management, according to people familiar with the deal.

The order book was fully pre-filled before the launch, allowing the deal to be executed within 48 hours, including investor roadshows, the people said, asking not to be identified because the information is private. The demand has come primarily from domestic institutional investors, who accounted for 65 per cent of the subscription, while global investors made up the remaining 35 per cent, they added.

Adani Enterprises and the institutions did not respond to requests for comment.

The ports-to-power conglomerate launched the share sale on Thursday, offering as many as 34.7 million shares to institutional investors at an indicative price of 2,883 rupees apiece, according to terms of the deal seen by Bloomberg News. The indicative price represented a discount of about 9 per cent to the stock’s Thursday closing price of 3,177.50 rupees. The transaction included an option to increase the size of the offering.

Jefferies Financial Group, SBI Capital Markets, ICICI Securities and IIFL Capital Services are the book-running lead managers for the share sale.

Adani Enterprises plans to use the proceeds to fund capital expenditure at its businesses, including the construction of a polyvinyl chloride plant and the payment of concession fees for a road project. The company may also use part of the funds to reduce debt at its solar, airport and copper businesses.

In December, Adani Enterprises raised 250 billion rupees through a rights issue of partly paid equity shares, issuing 138.5 million shares at 1,800 rupees each. The company’s stock has gained 42 per cent so far this year.

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Adani Enterprises operates as the primary business incubator for the Adani Group, focusing on diverse infrastructure and emerging industrial sectors, according to its website. Its core operations include airport management, solar manufacturing, road and rail infrastructure, data centres, defence and aerospace, green hydrogen ecosystems, and mining services. BLOOMBERG