Adani Enterprises, Adani Energy Solutions Plan QIPs to Boost Market Presence

Adani group companies, Adani Enterprises Ltd and Adani Energy Solutions, are preparing to enter the markets soon through qualified institutional placement (QIP) offerings, aiming to raise up to $2.5 billion, according to sources familiar with the group's plans, as reported by Moneycontrol.

Moneycontrol first reported on May 26 that the boards of Adani Enterprises Ltd and the group’s energy transmission and distribution business, Adani Energy Solutions Ltd, were considering approving fundraising plans totaling $3.5-4 billion collectively.

The group has been engaging with investors over the past couple of weeks, and the two QIPs could be launched after the budget, according to the sources cited.

Adani Enterprises and Adani Energy Solutions are set to collectively raise around $2-2.5 billion. Adani Energy Solutions is expected to raise around $750 million (approximately ₹6,266 crore), while Adani Enterprises aims to raise around $1.5 billion (approximately ₹12,532 crore).

The two companies plan to use the proceeds to fund capital expenditures and growth plans, as well as to repay certain borrowings. Investment banks Jefferies and Axis Capital have been appointed to manage the fundraising process for both companies, according to the sources cited.

Both companies have recently received shareholder approval for their fundraising plans. Adani Enterprises shareholders approved raising up to ₹16,600 crore, while shareholders of Adani Energy Solutions approved a fundraise of up to ₹12,500 crore.

The plans to raise funds through a potential equity dilution come as Adani group stocks have recovered from the impact of the Hindenburg Research report released in January 2023 and have returned to pre-Hindenburg levels.

On May 24, Moneycontrol reported that six Adani Group stocks, including Adani Enterprises Ltd, Adani Green Energy Ltd, and Adani Ports & SEZ, have erased the losses caused by the Hindenburg report and are now trading above their January 2023 levels, when the report was published by the short seller.

In an interesting development in the Adani-Hindenburg saga, earlier this week, American short-seller Hindenburg Research described a Sebi show-cause notice, which stemmed from its 2023 report against the Adani Group, as nonsensical and concocted. “We think it is nonsense, concocted to serve a pre-ordained purpose: an attempt to silence and intimidate those who expose corruption and fraud perpetrated by the most powerful individuals in India,” Hindenburg said in a post on its website.

According to Hindenburg, the show-cause notice emailed on June 27 focused solely on the technical elements related to its disclaimer and did not consider the content of its 106-page report.