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MUMBAI : Billionaire Gautam Adani and his family are in early talks with investors, including Temasek, Singapore’s sovereign wealth fund GIC, and other wealth and private equity funds, to raise at least $10 billion to fund the group’s expansion plans in clean energy, ports and cement businesses.

Adani family members and top group executives held discussions with several potential investors, two people with direct knowledge of Adani Group and the Adani family’s plans said on the condition of anonymity.

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“They (Adani Group promoters and top management) were in Singapore last week. Earlier, they separately met West Asian and American investors. Talks are still on. Hopefully, $10 billion should be easy to raise. The only issue is that since the capital raising is through equity sales and most of the Adani firms’ shares are steadily rising, pricing of deals will be critical," one of the two people said.

“Adani Group may raise the capital either at the group level or at the promoter-family level or both. They are discussing the structure," the person said.

The capital will be raised via multiple tranches and most likely through the sale of stakes in Adani Group firms or promoter group-associated entities, according to the second person.

An email sent to a spokesperson for Adani Group did not elicit any response. Spokespeople for GIC and Temasek declined to comment. “GIC does not comment on individual deals," a GIC spokesperson said. Similarly, a Temasek spokesperson said the company “does not comment on market speculation and rumours".

The capital raising is primarily aimed at funding the expansion plans of the group’s cement, ports, green energy, and fast-moving consumer goods businesses.

“Members from Adani Group met multiple investors through the last fortnight or so to raise capital," said the second person.

“Considering the persistent rise (of Adani companies’ shares), investors may look for small stakes. But strategic players may be keen on joint ventures or coming in at a premium, especially in the clean energy and cement business," said the first person.

In a speech on 27 September, Gautam Adani said, “We will invest over $100 billion of capital in the next decade. We have earmarked 70% of this investment for the energy transition space. We are already the world’s largest solar player and intend to do far more. It is our commitment to investing $70 billion in an integrated hydrogen-based value chain."

In addition to the group’s 20GW renewables portfolio, the new business will be augmented by another 45GW of hybrid renewable power generation spread over 100,000 hectares—an area 1.4 times that of Singapore, which will lead to the commercialization of 3 million tonnes of green hydrogen, Adani said in the speech.

Adani Group is also building a 10GW silicon-based photovoltaic value chain that will be backward-integrated from raw silicon to solar panels, a 10GW integrated wind turbine manufacturing facility, and a 5GW hydrogen electrolyzer factory.

The group intends to become one of the least expensive producers of the green electron, and thereafter, the least expensive producer of green hydrogen, Adani said in the speech.

Adani Group is India’s largest airport operator, with 25% of passenger traffic and 40% of air cargo. The conglomerate operates the largest ports and logistics company in India, with a 30% market share.

After acquiring Ambuja Cements and ACC Ltd for over $6.5 billion, Adani Group became the country’s second-largest cement maker. Adani Group companies’ combined market cap stands at over $260 billion.

On Friday, Adani, in a speech in Rajasthan, said that his group has invested over 35,000 crore across multiple sectors in Rajasthan and the implementation of an additional 10,000 megawatts energy generation, with an investment of 50,000 crore over the next five years, is underway.

Adani already has three cement plants and limestone mining assets following its acquisition of ACC and Ambuja Cements.

“A significant part of our capacity expansion will continue to happen in Rajasthan. We anticipate investing another 7,000 crore to double our cement manufacturing capacity in the state," Adani said in his Friday speech.

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ABOUT THE AUTHOR

Anirudh Laskar

Anirudh Laskar is a senior editor at Mint, with 17 years of experience. He has reported on significant corporate matters including large mergers and acquisitions, India's emerging e-commerce sector and regulatory issues in the financial services industry. Based out of Mint’s Mumbai bureau, Anirudh has worked with Business Standard and The Telegraph before joining Mint in 2009.
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