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Adani Green Energy Ltd is in talks with global fund managers to raise ₹5,000-6,000 crore, two people familiar with the plans said, as India’s largest renewables company revives its capex plans four months after the Hindenburg setback.
The fund raising will include sale of new shares, as well as promoter shares worth 3-4% held by Adani family entities including group founder Gautam S. Adani (on behalf of Shantilal Bhudermal Adani Family Trust), the people cited above said on the condition of anonymity. The trust owns 20.76% in Adani Green, while Adani Trading Services Llp and Infinite Trade And Investment Ltd hold 29.94% and 6.28% respectively.
In January, the Adani group companies had put capex and fundraising plans on hold after a blistering report by US short-seller Hindeburg Research accusing the conglomerate of stock price manipulation and accounting fraud hammered their shares. The group has denied all charges.
“The plan is to raise $500-750 million. The fund raising is likely to be done through a qualified institutional placement (QIP). The board of Adani Green will meet on 24 May to approve the fund raising plan,” the first of the two people said.
According to the two people, the QIP, which could be launched in the next few months, will be on top of Adani Group’s existing plan to raise $2.5 billion through separate QIPs in the group’s listed flagship Adani Enterprises Ltd and Adani Transmission Ltd.
Proceeds from the Adani Green QIP may go to reduce debts and revive capex plans to fast-track growth strategies, especially in its mega solar and wind energy projects.
“We do not comment on routine business matters. All public disclosures on business matters are made when appropriate,” an Adani Green spokesperson said.
Adani Green’s latest fund-raising plan follows a steady recovery in Adani Group stocks that began a fortnight back. Adani Green shares are up 125% to ₹988.8 from its 52-week low of ₹439.1 on 28 February. As on 28 February the stock had lost 75% from ₹1,917 on 24 January. The company, however, is still trading 48.4% below its 24 January level.
Adani Green, with assets in wind and solar, is aiming to scale up its operational renewable energy production capacity by 5.6 times from 8.1 GW now to 45 GW by 2030. The company develops, builds, owns, operates and maintains utility-scale grid-connected solar and wind farm projects
A project to add operational capacity of 12.3 GW is now under construction, according to an Adani Green investor presentation on Tuesday.
Adani Green is betting on the government’s aim to strengthen India’s renewable energy capacity from 110 GW to 200 GW by FY2027 and 305 GW by FY2030.
“Timely execution of projects, tie-ups with multiple vendors and higher proportion of sovereign counterparty projects are focus areas,” said a 18 May, 2023 report by Jefferies Group Llc.
At the end of March, Adani Green had net debt of ₹51,221 crore that it had taken to finance growth. The company intends to repay its ₹45,436 crore of long-term debt in instalments through FY33. About ₹39,600 crore of the company’s debt is linked to the operational capacity, while the balance is on upcoming.
In FY25, Adani Green has a major repayment due of ₹22,454 crore coming up, including repayments towards borrowings planned to be refinanced of ₹21,167 crore (RG1 or restricted group- ₹4,109 crore, Holdco bond- ₹6,133 crore, construction facility ₹10,200 crore and other ECB- ₹725 core).
Adani Green is in the process of setting up the world’s largest hybrid cluster project of 15 GW across 70,500 acres in Khavda, Gujarat.
Jefferies expect Adani Green’s revenue to rise from ₹7,792 crore to ₹10,700 crore by the end of FY24, with an estimated operating profit of ₹8,178.3 crore during the fiscal year.
The Adani Group had lost over $140 billion in market value after the Hindenburg report, and was forced to call off its follow-on public offering (FPO) in February. However, over the past two weeks, Adani Group has kicked off various fund-raising plans, expecting to emerge clean in a regulatory probe over allegations of stock price manipulation, following a 2 March Supreme Court order.
Last week, Adani Enterprises and Adani Transmission secured board approvals for QIPs totaling $2.5 billion. On Tuesday, GQG Partners increased its holding in Adani Group by purchasing 10% in Adani Enterprises for $3.5 billion, as stocks of Adani group firms rallied sharply.
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