Adani Enterprises Limited, the flagship firm of Billionaire Gautam Adani, on October 9 launched the first tranche of its qualified institutional placement (QIP) offering to raise as much as $500 million, with the intention of launching a second QIP in the coming months to raise more funds.
Adani Enterprises board in May had approved a total fundraise of Rs 16,600 crore or approximately $2 billion.
To be sure, while the QIP launched on October 9 has a base size of $500 million, the company could raise a bigger amount using a green shoe option, said sources, adding that any additional fundraise will depend on investor demand.
Sources said that the offering already has a strong investor demand, but the green shoe is a discretionary option for the company to exercise and they may choose to not do so right now and raise additional funds through another QIP in the next three to four months.
Once approved by shareholders an equity fundraising resolution is valid for 12 months and a company can raise the total amount through multiple QIPs or a mix of various fundraising routes.
Another source added that while the company was planning to launch the share sale later in the month, plans were advanced due to the escalation of conflict in the Middle East and its impact on global equity flows.
Moneycontrol reported on October 9 that Adani Enterprises has tapped Gulf sovereign funds including Abu Dhabi Investment Authority, Qatar Investment Authority and Rajiv Jain’s GQG for the QIP.
A spokesperson for Adani Group could not be immediately reached for a comment.
Funds to be raised from the proposed QIP are planned to be used for capital expenditure purposes as well as to repay some existing debt of the company and its subsidiaries.
Adani Enterprises, which acts as an incubator for many of the group’s new businesses, houses the group’s airports, mining, infrastructure, data centres and green hydrogen businesses.
On May 28, the company's board had approved plans to raise up to Rs 16,600 crore through a QIP.
The Adani Enterprises QIP follows a similar institutional share sale in Adani Energy Solutions Limited at the end of July. Adani Energy Solutions is the transmission and electricity distribution business of the Adani group.
Adani Energy Solutions raised around $1 billion through its QIP, which was subscribed almost six times.
Investors who participated in Adani Energy Solutions QIP included foreign investors such as GQG, Blackrock, Nomura, ADIA, QIA and a bunch of domestic mutual funds such as SBI MF, HDFC MF and Tata MF, Moneycontrol reported on July 30.
Last month, Adani Enterprises made its maiden foray into the retail NCD market raising Rs 800 crore from retail investors through debt instruments.
The NCDs, with tenors ranging from two to five years, offered an effective annual yield of 9.25 percent to 9.90 percent and were fully subscribed on the first day.
Moneycontrol reported on September 5 that the Adani Group plans to raise between Rs 30,000 and Rs 40,000 crore from retail investors over the next 3-4 years to diversify sources of funds and mitigate risk.
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