Gautam Adani is making big plans to mop up a total of Rs 10,000 crore through a qualified institutional placement (QIP) of shares of Adani Enterprises, Adani Power and Adani Ports & Special Economic Zone to fuel the group's growth.
The money may be raised in phases starting in the last week of August, with Adani Ports likely to hit the market first. The QIP would entail raising Rs 5,000-6,000 crore in Adani Enterprises while the rest Rs 4,000-5,000 crore may be equally split between Adani Power and Adani Ports, four sources in the know said. QIP has emerged as the preferred mode for most listed companies.
Listed companies prefer QIPs since they allow the firms to raise money quickly by issuing equity instruments to institutions or qualified institutional buyers.
The past two months have seen a series of QIPs by Indian companies, including Reliance Communications Idea, Cellular, GMR Infrastructure and JP Associates.
Since June, companies have raised Rs 20,000-25,000 crore via QIPs, according to market experts.
Companies are grabbing the opportunity to tap renewed interest in the country by global investors after the new government came to power. The recent share rally has improved valuations and companies are queuing up with fund-raising plans.
The Adani Group is among the most indebted companies in India and an equity fund-raising would help it ease the leverage on its balance sheet.
On July 16, the three Adani Group companies informed the bourses that they would seek shareholder approval at the annual general meeting on August 9 to raise funds by issuing equity instruments. The notices to shareholders did not specify the time or mode of the fund-raising, which is up to Rs 6,000 crore in Adani Enterprises and a maximum of Rs 5,000 crore each in Adani Power and Adani Ports.
Responding to a detailed query from ET, an Adani Group spokesperson said, "It is our philosophy to create long-term value for our stakeholders by following optimum financing solution. It is in this context that we are seeking enabling resolutions from shareholders at the ensuing AGM. However, there is no immediate plan for raising equity resources."
While the group says it has no "immediate plans", investment bankers told ET that Gujaratbased Adani has been talking to merchant bankers about an issue and has narrowed down on a foreign brokerage. The road shows for the issue may start soon and the first tranche of the QIP may be before mid-September.
Adani Enterprises, the group's mining arm, would use the money raised for its own capital expenditure and may also extend loans to other group companies, sources said.
Adani Power, which currently has thermal and solar capacity of 8,580 Mw, may use the funds to finance acquisitions in the hydropower sector. The company has internally discussed plans to own 1,000-1,500 Mw of hydro power capacity, which may be achieved via acquisitions.
Adani Ports & SEZ's fund-raising will be aimed at part-financing its Rs 2,100-crore container terminal at Mundra Port and a planned container terminal at its recently acquired Dhamra port in Odisha.
While shares of Adani Enterprises have declined 0.74% in the past three months, other Adani shares are among the big beneficiaries of the recent rally in the stock markets. In the past three months, Adani Ports &
SEZ soared almost 40% and Adani Power gained 10%, even as the BSE benchmark Sensex advanced 15%.
Source : economictimes.indiatimes.com