Billionaire Gautam Adani's flagship company, Adani Enterprises, is reportedly negotiating with several institutional investors, including the Abu Dhabi Investment Authority (ADIA), Qatar Investment Authority (QIA), and Rajiv Jain's GQG Partners, to raise Rs 1,67,92,60,00,000 through a Qualified Institutional Placement (QIP). This initiative aims to bolster the company's capital expenditure and manage existing debt, as outlined in a recent report.
The discussions involve around a dozen institutional investors who have previously backed various Adani Group ventures. The QIP is expected to launch once firm commitments are secured from these investors, with plans to initiate the share sale by the end of October. Despite enquiries sent to the Adani Group and the involved investors, responses have been limited, with ADIA declining to comment and other queries going unanswered.
In May 2024, Adani Enterprises' board approved a significant fundraising plan, targeting up to Rs 16,600 crore through a QIP. This follows a successful fundraising round by Adani Energy Solutions, which raised nearly Rs 83,96,23,50,000 in July, attracting substantial interest from both foreign and domestic investors.
The funds from the upcoming QIP are crucial for Adani Enterprises as it navigates increasing financial obligations. The company's total debt surged to Rs 50,124 crore in FY24 from Rs 38,320 crore in FY23. Long-term borrowings also rose sharply, indicating a trend towards higher leverage amid efforts to enhance liquidity.
Additionally, the Adani Group is diversifying its funding sources. Plans are underway to raise between Rs 30,000 crore and Rs 40,000 crore from retail investors through non-convertible debentures (NCDs) over the next few years. This strategy aims to mitigate risks associated with reliance on institutional funding.
As Adani Enterprises positions itself for this significant capital influx, market observers will be keenly watching how these negotiations unfold and their potential impact on the company's future growth trajectory.
