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Adani Capital in fund raise mode; Eyes Rs 1,000 cr-Rs 1,500 cr for growth capital

Adani Enterprises, the Adani group flagship, plans to raise Rs 12,500 crore, while power transmission venture Adani Transmission is aiming for Rs 8,500 crore, the companies said in recent stock exchange filings.

May 27, 2023 / 07:50 AM IST

A clutch of top private equity funds has expressed interest in the proposed transaction, said an industry source

Gautam Adani-led Adani Group's non-banking financial services (NBFC) arm Adani Capital plans to raise as much as Rs 1,500 crore from strategic and private equity investors to boost growth, multiple industry sources in the know told Moneycontrol.

"The firm, which has a focus on MSME growth and rural development, is looking at a primary capital raise of around Rs 1,000 crore to Rs 1,500 crore," one of the them told Moneycontrol.

According to a second person Moneycontrol spoke to, a clutch of top private equity funds has expressed interest in the proposed transaction.

A third person told Moneycontrol that investment bank Avendus Capital has been mandated by Adani Capital for the deal. Depending on the expectations of the incoming investors, a secondary sale will also likely to be explored for additional stake if required, this person added.

"Ninety percent stake is held by the Adani group and the balance by the management team. Adani Capital has done well and plans to grow the AUM to Rs 10,000-12,000 crore in the next 2-3 years," a fourth person elaborated. At the end of FY23, Adani Capital managed assets worth Rs 3,977 crore.

All the four persons above spoke to Moneycontrol on the condition of anonymity.

When contacted, the Adani Group confirmed the capital raise plans.

"The Adani Group is looking to raise additional capital from strategic and financial investors to enable Adani Capital to grow further, independently," an Adani Group spokesperson told Moneycontrol.

"Any speculation that the Adani Group is looking to exit Adani Capital is baseless," the spokesperson added further.

Avendus Capital declined to comment in response to an email query from Moneycontrol.

Adani Capital is not the only Adani group company raising funds. Adani Enterprises, the group flagship, plans to raise Rs 12,500 crore, while its power transmission venture, Adani Transmission, is aiming for Rs 8,500 crore, the companies said in recent stock exchange filings.

In an interview to Bloomberg dated May 24, veteran investor Rajiv Jain said his firm GQG Partners LLC had raised its stake in the Adani Group by about 10 percent and would take part in the conglomerate’s future fund raising, doubling down on what he calls “the best infrastructure assets available in India."

A closer look at Adani Capital

At the end of FY2023, Adani Capital had an AUM of Rs 3,977 crore, up 63 percent a year ago. It also reported gross disbursements of Rs 2,482 crore and a total income of Rs 599 crore in FY23, up by 96 percent and 99 percent, respectively, on a YoY basis. The firm clocked a PAT of Rs 105 crore.

It had 168 branches across eight states with a team strength of 2,534.

According to its website, Adani Capital, which commenced lending operations in 2017 and is headed by CEO Gaurav Gupta, has disbursed loans in excess of Rs 9,000 crore. The firm is expanding its branch network in the states of Gujarat, Maharashtra, Rajasthan and  Madhya Pradesh.

Its business can be categorized into retail and rural financing (agri value chain, trade and supply chain, MSME) and wholesale financing ( corporate, infrastructure and real estate).

Lens on financial services: Deals galore

The financial services segment has seen a flurry of mergers and acquisitions and fund-raising activity in recent times.

The sale process for education loan provider HDFC Credila has reached an advanced stage with private equity fund BPEA EQT seen as a lead contender.

ALSO READ: MC Exclusive | Race for HDFC Credila: Consortium of BPEA EQT, Chrys Capital & Faering Capital in the lead

Moneycontrol was the first to report that Aditya Birla Capital and Federal Bank had both appointed advisors for a capital raise of around Rs 2,000 crore and up to Rs 4,000 crore, respectively, via the QIP plus preferential allotment route.

Gurugram-headquartered affordable housing firm India Shelter Finance, which is backed by Westbridge Capital and Nexus Venture Partners, is gearing up to launch an initial public offer (IPO) to raise around Rs 2,000 crore.

Ashwin Mohan
first published: May 26, 2023 11:05 pm