Adani To Raise Up To <span Class='webrupee'>₹</span>20,000 Cr Via Follow-on Public Offering

The company will seek shareholders’ nod for the share sale by postal ballot, the company said in a stock exchange filing.

If Adani Enterprises manages to raise the entire ₹20,000 crore, it will make the share sale the country’s biggest FPO to date. Currently, that record is held by Yes Bank, which raised ₹15,000 crore through an FPO in July 2020.

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Mint reported on 24 November that the funds to be mobilized from the FPO would help finance the group’s foray into green and digital businesses and provide most of the equity required for its expansion plans for the next 3-5 years.

In September, Adani, the second richest person in the world, said his group would invest $100 billion over the next decade, primarily in energy transition and digital opportunities, as well as sectors such as aerospace and defence, metals and petrochemicals. Of this, 70% is earmarked for the energy transition. “It is our commitment to investing $70 billion in an integrated hydrogen-based value chain," Adani said while laying out his group’s plans.

“Adani Enterprises, the incubator in the conglomerate, has blue-printed a 3-5 year plan for fundraising. The current fundraising plan will take care of 80-90% of its equity funding requirements for the said period," an Adani executive told Mint earlier. He did not want to be named.

According to the executive, the Adani Group businesses generate a consolidated Ebitda of about ₹30,000 crore, of which ₹13,000 crore is used to service the group’s debt. The balance ₹17,000 crore goes into financing growth, he said.

In its role as an incubator, Adani Enterprises will, over time, spin-off companies such as airports, data centres, green hydrogen and road projects. According to the Adani executive, each of these firms generates free cash flow.

The group has recently held roadshows in leading metros to explain its businesses to investors. The healthcare vertical, for now, is a not-for-profit enterprise.

This quarter, the group’s airport business turned cash flow positive. Adani Airports won the mandate to modernize and operate six airports—Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram—through the Airports Authority of India’s tendering process. In addition, it owns and runs the Mumbai airport.

Fundraising through an FPO allows Adani Enterprises to bring in a wider set of investors, thereby increasing the float and liquidity of the stock, which could lead to better price discovery in the market.

The FPO plan is also in line with the group’s recent efforts to diversify its sources of funding. Mint reported on 7 November that Adani Enterprises plans to raise as much as ₹2,000 crore through a maiden retail bond sale by December.

Investment banks ICICI Securities and Jefferies have started work on the offer document for the FPO, and more banks will be on-boarded closer to the filing of the document.

On Friday, shares of Adani Enterprises fell 0.48% to end trading at ₹3,903.35 on BSE.