Adani Green to raise Rs 12,300 cr to fund expansion

Billionaire Gautam Adani-led group's renewable energy firm on Thursday announced plans to raise Rs 12,300 crore through a share sale to investors as the group continues to build on a comeback strategy to emerge out of allegations of fraud levelled by a US short-seller.

Adani Green Energy Ltd in a stock exchange filing said its board has approved raising up to Rs 12,300 crore through an issue of equity shares by way of qualified institutional placement (QIP).

The funds are intended to be used for meeting capital needs of the company's expansion plans.

Two other group companies in May announced similar plans.

Adani Enterprises Ltd, the group's flagship firm, plans to raise Rs 12,500 crore while electricity transmission company Adani Transmission another Rs 8,500 crore.

The fundraise will be through an issue of shares to qualified institutional buyers.

Sources aware of the matter said investors in Europe and the Middle East have evinced strong interest.

This comes five months after Adani Enterprises was forced to abort a Rs 20,000 crore follow-on public offering (FPO) in the wake of the Hindenburg report.

The offer was fully subscribed but the company returned the money to subscribers.

US short-seller Hindenburg Research in January released a damning report alleging accounting fraud and stock price manipulation at Adani Group, triggering a stock market rout that had erased about $145 billion in the conglomerate's market value at its lowest point.

Adani Group has denied all allegations by Hindenburg and is plotting a comeback strategy that includes recasting its ambitions, scrapping acquisitions, pre-paying debt to address concerns about its cash flows and borrowings, and scaling back its pace of spending on new projects.

Promoters in two tranches have sold shares worth Rs 23,711 crore in four group companies to leading US-based global equity investment boutique GQG Partners.

The group has been trying to win back market confidence with a series of investor roadshows, early debt repayments, and plans to scale back its pace of spending on new projects.

The funds that Adani Group is looking to raise will be the conglomerate's biggest borrowing since the January 24 Hindenburg report.

The money raised is intended to be used for funding the group's expansion projects.

The group's flagship and incubator Adani Enterprises Ltd is developing businesses like airports, roads (transport and logistics), data centres, copper and green hydrogen, which could lead to massive value unlocking over the next 5 to 15 years for its investors, they said.

Its incubator model has a 100 per cent success rate of creating unicorns and has built unicorns like Adani Transmission, Adani Power and Adani Ports & SEZ.

The combined market capitalisation of these four companies alone stands at $62 billion - almost twice that of the incubator.

The management, in the recent past, has said that they will be separately listing airports and road businesses in the next 3-4 years.

Adani Green has emerged as the largest and fastest-growing renewable energy player in India.

Its green capacities have grown at 33 per cent CAGR over the past five years, outpacing the industry average of 15 per cent.

Currently, the size of its renewable energy portfolio stands at 20.4 GW (8.2 GW operational and another 12,2 GW under construction and near construction projects).

It is targeting a 45 GW portfolio by 2030.