The Adani Group, a leading Indian conglomerate, has announced plans to raise up to $2.57 billion through two of its companies, Adani Enterprise and Adani Transmission. This fundraising effort marks a critical test for the Indian billionaire Gautam Adani, whose group faced allegations of stock market manipulation and tax haven use by U.S-based Hindenburg Group in January of this year. The equity fundraising will be the first real indication of investor confidence in the group since it cancelled a $2.5 billion share sale earlier this year in response to the allegations.
The Adani Group intends to raise the funds through the sale of equity shares, a move that will reduce the need for pledges and demonstrate strength to investors. The group's shares have risen in recent months, though they remain well below pre-allegation highs. The fundraising will be executed through qualified institutional placements or other permissible modes.
This announcement comes after the Adani Group's subsidiary, Adani Green Energy, rescheduled its board meeting to May 24th, leading to speculation that the company would also announce similar funding plans. The Adani Group's March announcement of a $1.87 billion investment from U.S-based investment firm GQG Partners across Adani Enterprise, Ports, Transmission and Green Energy via secondary market deals, also boosted investor confidence.
The Adani Group's announcement of its fundraising plans indicates that the necessary funding has been locked up, according to Varun Khandelwal, Director at Bullero Capital, a New Delhi-based proprietary trading firm. While the allegations made by Hindenburg Group are still under investigation by India's market regulator, the Adani Group has denied the claims and has been pushing forward with its plans for expansion. Adani Enterprise's January-March profits doubled from the previous year to $88 million, boosted by a strong performance at its key coal trading division.
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