-The company is tapping industry opportunities, such as green hydrogen, the aviation sector and data centers
-In a rare move for a follow-on sale, Asia’s richest man will allow retail investors to pay for their purchases in tranches
New Delhi, NFAPost: Richest Indian Gautam Adani-led group’s flagship firm on Wednesday filed an offer letter with stock exchanges for a proposed Rs 20,000 crore follow-on public offer (FPO).
The FPO of Adani Enterprises Ltd (AEL) is planned to open on January 27 and close on January 31, according to the offer letter.
Of the Rs 20,000 crore proceeds of the FPO, Rs 10,869 crore will be used for green hydrogen projects, work at the existing airports and construction of a greenfield expressway. Another Rs 4,165 crore will go towards repayment of debt taken by its airports, road and solar project subsidiaries.
Adani, 60, started off as a trader and has been on a rapid diversification spree, expanding an empire centered on ports and coal mining to include airports, data centers and cement as well as green energy. And AEL is the vehicle for most of the new business expansion.
AEL is India’s largest listed business incubator and breeds businesses in four core industry sectors – energy and utility, transportation and logistics, consumer, and primary industry.
“We have, over the years, seeded new business interests for the Adani group, developed them into sizeable and self-sustaining business verticals and subsequently demerged them into independently listed and scalable platforms,” it said.
Its current business portfolio includes a green hydrogen ecosystem, data centers, developing airports, developing roads, food FMCG, digital, mining, defence and industrial manufacturing, among others.
The company is tapping industry opportunities, such as green hydrogen, the aviation sector and data centers.
“We are setting up a green hydrogen ecosystem with an objective to incubate, build and develop an end-to-end integrated ecosystem for the manufacture of green hydrogen,” it said.
This ecosystem includes manufacturing renewable energy equipment such as wind and solar modules to reduce cost of renewable power, production of renewable energy and green hydrogen itself, and transformation of a part of the green hydrogen produced into derivatives, including green nitrogenous fertilizers, ammonia and urea, both for the domestic market and exports, it added.
AEL operates and manages seven operational airports across the cities of Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram, and one greenfield airport in Navi Mumbai. It is also developing infrastructure projects such as roads in India.
It had previously announced plans to invest USD 50 billion over the next 10 years in the green hydrogen ecosystem for the production of up to 3 million tonne of green hydrogen. Also, it plans to expand its solar module manufacturing capabilities at Mundra SEZ in Gujarat to up to 10 GW per annum.
As of September 30, 2022, it had Rs 40,023.50 crore in borrowings.
Adani to give 10% discount to investors in follow-on offer
Gautam Adani’s flagship will offer large investors discounts of as much as 10% in India’s biggest follow-on share sale, according to people with knowledge of the matter, as the billionaire tries to woo a wider set of backers.
Concessions to retail purchasers could be steeper, the people said, asking not to be identified as the details are private. Adani Enterprises Ltd. is seeking to raise 200 billion rupees ($2.5 billion) by selling shares in a business that has almost doubled in market value over the past year.
Roughly half the money will go toward expanding Adani’s airport and renewable energy projects, while some 42 billion rupees — a little less than a quarter of the amount raised — will be used to pare debt, the company said in its prospectus filed Wednesday. Anchor investors can bid Jan. 25 and the rest Jan. 27-31.
In a rare move for a follow-on sale, Asia’s richest man will allow retail investors to pay for their purchases in tranches. This could mean a 50% upfront payment, followed by two installments of 25% each, one of the people said. An email sent to Adani Enterprises’ representative Wednesday wasn’t immediately answered.
The massive share sale would help Adani meet multiple goals. Broadening his investor base would fend off allegations that his empire comprises mainly thinly traded stocks; repaying debt addresses concerns about overleverage; and winning over mom-and-pop investors would cement Adani’s legacy as a wealth creator in a nation with widening income inequality.
Adani Enterprises’ shares have surged 95% over the past year to 3,596.7 rupees. The stock is trading at a valuation of over 141 times its one-year forward earnings. By comparison, Reliance Industries Ltd. — India’s largest firm by market value — is at about 20 times, according to data compiled by Bloomberg.
“We have done strategic capital. The next capital is patient capital,” Chief Financial Officer Jugeshinder Singh had said in an interview in November. “Indian mom and pop investors invest for their children and grand children.”
