MUMBAI: Adani Enterprises Ltd, the flagship company of billionaire Gautam Adani, on Friday said its board has approved a hike of up to Rs 20,000. 20,000 crore through a follow-on public offer or FPO, the company said in a stock exchange filing.
The company has said in a filing to the stock exchanges that the company will seek shareholders’ approval for raising funds through the postal ballot process.
The promoters currently hold 72.63% shares of Adani Enterprises. Of the rest, about 20% is held by insurance companies and foreign portfolio investors.
If Adani manages to raise 20,000 crore, making this share sale the largest FPO ever. Yes Bank July 2020 FPO Price 15,000 crore currently holds that record.
Mint reported on November 24, citing multiple unnamed sources, that the FPO proceeds would be used to invest in Adani Group’s green and digital businesses and raise the equity needed for its expansion plans over the next three to five years. will provide a major portion.
In September, Adani, India’s richest man and the second richest in Asia, said his group would invest $100 billion over the next decade, mainly in energy transition and digital opportunities, as well as in aerospace and defence, metals and petrochemicals. in areas.
Of this proposed investment, 70% is earmarked for the energy transition site. Adani had said, “We have a commitment to invest $70 billion in an integrated hydrogen-based value chain.”
“Adani Enterprises, the incubator in the group, has drawn up a 3-5 year plan to raise funds. The current fund raising plan will take care of 80-90% of the equity funding requirements for the said period,” an Adani executive told Mint Told earlier. He didn’t want to name.
According to the executive, Adani Group’s businesses generate a consolidated EBITDA (earnings before interest, tax, depreciation and amortization). 30,000 crore of which Rs. 13,000 crores is used to repay the debt of the group. Funding takes up the rest of the growth He said, 17,000 crores.
In its role as an incubator, Adani Enterprises will, over time, spin off companies such as airports, data centres, green hydrogen and road projects. According to the Adani executive, each of these companies generates free cash flow.
The Adani Group has been organizing roadshows in top Indian metros in the recent past to explain its businesses to Indian investors. For now the healthcare vertical is a “not for profit” venture.
The group’s airport business was cash flow positive during the quarter. Adani Airports won the mandate to modernize and operate six airports – Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram – through the tender process of the Airports Authority of India. In addition, they own and operate the Mumbai airport.
Fundraising through an FPO allows Adani Enterprises to tap into a wider pool of investors thereby increasing the float and liquidity of the stock which may lead to better price discovery in the market.
The FPO plan is also in line with the group’s recent efforts to diversify its sources of funding. Mint reported on 7 November that Adani Enterprises plans to raise the same amount 2,000 crore through the first retail bond sale by December.
Investment banks ICICI Securities and Jefferies have started working on the offer document for the follow-on public offering and more banks will get closer to filing the document.
Adani Enterprises shares on BSE on Friday at 3,903.35, down 0.48% from its previous close.