The head of billionaire Gautam Adani’s empire, Adani Enterprises Ltd., has received board clearance to raise up to 166 billion rupees ($2 billion), one day after the group’s power utility subsidiary received similar approval for $1.5 billion.
Adani Enterprises stated in an exchange filing on Tuesday that the holding company and business incubator of the Adani Group can use a variety of strategies, including a share sale to institutions. It further said that the funds may be raised in one or more tranches.
Similar board approval for Adani Energy Solutions Ltd. to raise up to 125 billion rupees ($1.5 billion) was granted on Monday, indicating a potential increase in capital expenditures from the ports-to-power business. According to their records, both companies still require additional approvals, including those from shareholders.
Similar approvals were obtained by these companies in 2023 in order to raise a total of $2.6 billion; however, those approvals were scheduled to expire in June, necessitating the acquisition of new board approvals.
The company is returning to rapidly growing its operations after raising about $6 billion from notable investors such as TotalEnergies SE, Qatar Investment Authority, and Rajiv Jain’s GQG Partners LLC since January 2023. After a stock market meltdown that destroyed more than $150 billion in market value, the company was compelled to control debt and scale down its rapid growth trajectory by Hindenburg Research’s vicious attack on short sellers early in the year.During trading, the flagship’s shares increased by 1.2% in Mumbai, bringing the year’s increase to 15%. Adani Energy’s post-market hours fundraising announcement on Monday caused its shares to rise as much as 2.8% during the day. By 12:31 p.m. Mumbai time, both stocks had lost their gains for the day.
As per Bloomberg News earlier this week, which cited people familiar with the internal deliberations, Adani Enterprises is expected to receive board consent for up to $1.5 billion, while Adani Energy has the capacity to raise up to $500 million.
According to the persons, the two businesses want to work with four or five significant foreign investors who are eager to support India’s infrastructure development. If the effort is successful, it will strengthen the Adani Group firms’ global clout and widen its shareholder base, which is one of the main charges leveled against them.
Resolutions enabling fundraising are approved by the board, allowing businesses to move swiftly once the best funding terms are discovered. Companies are not required to raise these kinds of cash.
As the company works to win back trust from lenders and investors, four out of ten Adani Group equities have reached pre-Hindenburg levels. Tycoon Adani’s net worth has increased by $25 billion this year to surpass $109 billion.
Adani Energy is still down about 60% below where it was prior to the short-seller’s shocking claim, although Adani Enterprises last week momentarily recovered all of its losses since the Hindenburg report.