Adani Green Energy Ltd., India’s largest renewables business, has revived its capex ambitions four months after the Hindenburg setback and is in negotiations with international investment managers to borrow $5,000–$6,000 crore, according to two people aware of the preparations.
According to the individuals stated above who spoke on the condition of anonymity, the capital raising would involve the sale of fresh shares as well as promoter shares worth 3-4% held by Adani family businesses, including group founder Gautam S. Adani (on behalf of Shantilal Bhudermal Adani Family Trust). Adani Trading Services Llp and Infinite Trade And Investment Ltd each hold 29.94% and 6.28% of Adani Green, while the trust owns 20.76% of the company.
After an alarming report by US short-seller Hindenburg Research accusing the conglomerate of stock price manipulation and accounting fraud battered its shares in January, the Adani group firms put capex and fundraising plans on hold. The organization has refuted every accusation.
“Raising $500-750 million is the goal. A qualified institutional placement (QIP) will probably be used to raise the funds. The Adani Green board will convene on May 24 to adopt the fund-raising strategy”, according to the first of the two persons.
The two individuals claim that the QIP, which may be introduced in the upcoming months, will be in addition to Adani Group’s current goal to raise $2.5 billion through separate QIPs in the group’s listed flagship Adani Corporation Ltd.
The Adani Green QIP’s proceeds might be used to pay down debts and restart capital plans in order to accelerate expansion initiatives, particularly for the company’s massive solar and wind energy projects.
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We decline to comment on standard business issues. When appropriate, all public disclosures on commercial matters are made, according to a representative for Adani Green.
The newest fund-raising strategy by Adani Green comes after a sustained upswing in the price of Adani Group equities that started a fortnight ago. Shares of Adani Green are now trading at $198.8, up 125% from their 52-week low of $439.1 on February 28. By February 28th, the stock had dropped by 75% from its 24 January high of 1,917. However, the stock is still trading 48.4% below where it was on January 24.
With wind and solar assets, Adani Green wants to increase the operating capacity of renewable energy generation from 8.1 GW to 45 GW by 5.6 times by 2030. The business creates, constructs, acquires, manages, and runs utility-scale grid-connected solar and wind farm projects.
According to a presentation given to investors by Adani Green on Tuesday, a project to increase operating capacity by 12.3 GW is now in the works.
The government’s plan to increase India’s renewable energy capacity from 110 GW to 200 GW by FY2027 and 305 GW by FY2030 is what Adani Green is banking on.
“Timely execution of projects, tie-ups with multiple vendors, and a higher proportion of sovereign counterparty projects are focus areas,” according to research by Jefferies Group Llc published on May 18, 2023.
Adani Green has taken on a net amount of debt of ₹51,221 crores at the end of March. Through FY33, the corporation plans to pay off its long-term debt in installments totaling ₹45,436 crores. The operating capacity is responsible for around ₹39,600 crores of the company’s debt, with the remaining amount being forthcoming.
A significant repayment of ₹22.454 crores is required from Adani Green in FY25, which includes payments for borrowings that are expected to be refinanced totaling ₹21.167 crores (RG1 or restricted group: ₹4.109 crores, Holdco bond: ₹6.133 crores, building facility: ₹10.200 crores, and other ECB: 725 core).
In Khavda, Gujarat, Adani Green is currently constructing the biggest hybrid cluster project in the world, a 15 GW project spread across 70,500 acres.
By the end of FY24, Jefferies forecasts Adani Green’s sales to increase from ₹7,792 crores to ₹10,700 crores, with a projected operating profit of ₹8,178.3 crores.
After the release of the Hindenburg report, the Adani Group’s market value decreased by almost $140 billion, and it was compelled to postpone its follow-on public offering (FPO) in February. However, after the 2nd March Supreme Court decision, the Adani Group has started a number of fund-raising initiatives over the past two weeks in the hopes of succeeding in a regulatory investigation into claims of stock price manipulation.
Adani Transmission and Adani Enterprises received board approvals for QIPs worth $2.5 billion last week. As shares of the companies in the Adani Group rose dramatically on Tuesday, GQG Partners boosted their stake in the company by spending $3.5 billion to acquire 10% of Adani Enterprises.
