Adani Energy Solutions raises $1 billion in share sale, 1st public equity raise since Hindenburg

Adani Group QIP fundraising: Adani Energy Solutions Ltd, the power transmission arm of billionaire Gautam Adani's conglomerate, has successfully raised $1 billion through a qualified institutional placement (QIP). This marks the first public equity raise by the Adani Group since the Hindenburg report triggered a dramatic fall in shareholder value last year.

The QIP, which opened on Tuesday, was oversubscribed three times, with total demand reaching approximately Rs 26,000 crore. This makes it the largest transaction in India's energy sector to date. The shares were issued at Rs 1,135 each, compared to the issue price of Rs 976 per share, reflecting a 14 percent discount.

QIP is a fundraising tool used by listed companies to raise capital from large institutional investors. The latest issue attracted prominent investors such as GQG Partners, Abu Dhabi Investment Authority (ADIA), and several top U.S. institutional investors. Domestic institutions, including Bandhan Mutual Fund, Nomura, and 360 India Infoline, also participated.

This fundraising effort comes after Adani Group's flagship firm, Adani Enterprises Ltd, had to cancel a planned Rs 20,000 crore share issue in February 2023 due to the fallout from the Hindenburg report. The report had accused the group of accounting fraud and stock manipulation, resulting in a significant decline in market value—over $150 billion was wiped off the group's listed companies at its peak.

Despite vehement denials from the Adani Group regarding the allegations, the successful QIP is seen as a strong indicator of renewed investor confidence.

In addition to the QIP, Adani Enterprises Ltd is planning to revive its initial public bond sale, targeting up to Rs 600 crore. The company has appointed Trust Investment Advisors, AK Capital Services, and Nuvama Wealth Management as lead managers for the bond issuance.

Earlier this year, in March, the group made its first return to the dollar bond market since the Hindenburg report, with its solar energy unit, Adani Green Energy Ltd, and associated entities receiving bids totaling about $2.9 billion.

In a stock exchange filing, Adani Energy Solutions Ltd confirmed that its management had approved the opening of the QIP issue and set the floor price at Rs 1,027 per equity share.

(With PTI inputs.)