Adani Enterprises stock in focus as company launches first tranche of QIP to raise $500 million
cbaadmin October 10, 2024
Adani Enterprises stock is in focus after the flagship firm of billionaire Gautam Adani-led conglomerate 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.
The company’s board had approved a total fundraising of Rs 16,600 crore or approximately $2 billion earlier this year in May. Note that while the QIP launched on October 9 has a base size of $500 million, Adani Enterprises could raise a larger amount using a green shoe option, sources told Moneycontrol, adding that any additional fundraising will depend on investor demand.
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 not to do so right now and raise additional funds through another QIP in the next three to four months, sources added.
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.
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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.
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 approved plans to raise up to Rs 16,600 crore through a QIP. Earlier on September 5, Moneycontrol reported 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.
Shares of Adani Enterprises closed marginally lower at Rs 3,152.40 on the National Stock Exchange (NSE) in the previous session. The stock has risen 8 percent so far this year, underperforming Nifty’s returns of around 15 percent.
In the past 12 months, the counter has rallied 26 percent, in-line with Nifty’s rise during this period.
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