Adani family plans $1 bn investment in conglomerate’s green energy unit

Adani, Gautam Adani

The company board will consider fundraising proposals on Dec. 26, including evaluating options such as selling shares or convertible securities, it said in a filing Wednesday without sharing any more details. (Photo: Bloomberg)


By P R Sanjai, Saikat Das and Baiju Kalesh

Billionaire Gautam Adani and his family plan to inject $1 billion into the conglomerate’s renewable energy unit, people familiar with the matter said, as the group races to reach ambitious green goals while facing maturing bonds next year.


   


Adani Green Energy Ltd. is looking to issue preferential shares to the company’s founders for meeting expansion and refinancing needs, according to the people familiar with the discussions who didn’t want to be identified as the talks are private. Shares rose as much as 6.7% in Mumbai after the news broke, paring this year’s loss to 20%.


An Adani Group representative didn’t offer an immediate comment on the founders’ investment.


The company board will consider fundraising proposals on Dec. 26, including evaluating options such as selling shares or convertible securities, it said in a filing Wednesday without sharing any more details. 


“An equity raise could boost deleveraging and lower refinancing risk, though governance concerns may linger,” Sharon Chen, a Bloomberg Intelligence analyst, wrote in a Dec. 15 note.  


The company, which has a goal of 45 gigawatts of green energy capacity by 2030, also has bond maturities worth $1.2 billion coming up next year and it has already begun outlining plans for repaying or refinancing those. It also raised a loan from eight banks earlier this month.


All these efforts underscore Adani Group’s attempts to draw a line over damaging allegations of corporate fraud levied by Hindenburg Research in January that plunged the ports-to-power conglomerate into crisis for months. 


Clawback Mode


Despite strongly denying these allegations, Adani companies lost over $150 billion in market value at one point. The conglomerate has since then been in clawback mode — it has lowered debt, got marque investors and secured US funding for its Sri Lanka port project — winning back investor and lender confidence. 


The group’s stocks saw a relief rally in its shares last month after India’s top court said it won’t take media reports on the conglomerate as the “gospel truth” while reserving verdict on its probe into Hindenburg’s allegations. Adani Green’s stock has jumped more than 65% since the top court made these observations end of last month.

First Published: Dec 21 2023 | 3:44 PM IST

Billionaire Gautam Adani and his family are planning to invest $1 billion into Adani Green Energy Ltd., the conglomerate’s renewable energy unit, according to sources familiar with the matter. The investment will be made through the issuance of preferential shares to the company’s founders, aimed at meeting expansion and refinancing needs. The news of the investment caused Adani Green Energy Ltd.’s shares to rise by as much as 6.7% in Mumbai. The company’s board will consider various fundraising proposals on December 26, including selling shares or convertible securities. Adani Green Energy Ltd. aims to achieve a green energy capacity of 45 gigawatts by 2030. The conglomerate is also facing bond maturities worth $1.2 billion next year and has started outlining plans for repayment or refinancing. The investment signals Adani Group’s efforts to recover from damaging allegations of corporate fraud earlier this year. Despite strongly denying the allegations, Adani companies suffered a significant decline in market value. However, the conglomerate has taken steps to reduce debt, secure investments, and regain investor and lender confidence. Adani Green’s stock has risen by over 65% since India’s top court dismissed media reports on the conglomerate as the “gospel truth” while investigating the fraud allegations.

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