Gautam Adani’s flagship company, Adani Enterprises, has recently raised 500 million USD via share sale to local insurance and mutual fund firms and an existing US-based investor. The share sale marks the company’s return to the equity market after it lost control over its 2.5 billion USD plan in February 2023 following the Hindenburg short-sellers report accusing the Adani Group of account fraud and Adani stock manipulation.
Adani’s Entry into The Equity Market
The Adani Group has once again made an entry into the equity market after the Hindenburg crisis which held the global conglomerate responsible for Adani stock manipulation. The Hindenburg report caused a severe blow to Adani Group’s business. The global conglomerate was not able to carry out its business operations with full force. It also faced severe shortage of cash which caused its multiple projects to come to a halt. The SEBI was also called to probe into the matter.
The SEBI continued to investigate the matter for a considerable amount of time. However, no such proof was found against the Adani Group. This ultimately caused the Supreme Court to give its verdict in favour of the Adani Group. As a result, the global conglomerate was once again able to get back to its original form. It started to carry out its various business operations with full force. It also started raising funds to carry out its various business operations.
The Recent Share Sale
The share sale which was launched recently was oversubscribed four times. It received bids up to 2 billion USD. SBI Life Insurance along with other local insurance and mutual fund firms and GQG Partners invested in the issue. The US boutique investment firm GQG Partners made infusions worth 1.87 billion USD in Adani Group of companies in 2023 right after the Hindenburg Report. This helped the Adani Group in restoring some confidence in its operations. Adani Enterprises in May 2023 approved raising up to 2 billion USD through a qualified institutional placement (QIP) method used by listed Indian companies to obtain the required funds from large investors.
The firm had initially planned to raise more funds if the market conditions were suitable. However, because of various geopolitical situations, accusations of Adani stock manipulation, and volatile market, it has decided to raise 500 million USD only for the time being. The business group still has multiple various plans for fundraising in the future. With the acquired funds, the group aims to carry out its various business operations smoothly. It also has elaborate plans to take up new projects in the upcoming years which will further allow it to spread out its horizons and build itself the reputation of being one of the biggest players in the global business sector.
How Doe Adani Enterprises Plan to Use the Proceeds of the Share Sale?
Adani Enterprises has an enhanced presence across multiple business sectors including airport, mining, and defence business. The company plans to make use of the proceeds of the share sale to fund new energy projects which will allow it to fulfil its energy goals. The group also has elaborate plans to set up a polyvinyl chloride plant. This will help the group in further diversifying its portfolio and achieve success on a global scale. A part of the fund will also be used to repay the debt at its airport units. By acquiring funds, the Adani Group will also be able to put an end to the controversies of Adani stock manipulation which have been ongoing for quite a while now.
Previously, the firm had also reached 8 billion rupees in its first-ever retail bond sale that saw strong demand. However, Adani, GQG Partners, and SBI Life Insurance did not make any comment on the same. This will be the second share sale by the Adani Group of companies after its power transmission unit raised 1 billion USD in July. This was done with investments from sovereign wealth funds from the United Arab Emirates and Qatar and various Indian mutual funds. This has once again let the path for progress for the Adani Group. It has also allowed the global conglomerate to further carry out its business operations in a streamlined manner.
Conclusion
By raising funds through share sales, the Adani Group has been able to strengthen its hold across diverse business sectors. As the group continues to acquire more funds for its projects, it will lead our country towards economic growth and progress. The global business group will also be able to acquire the reputation of being the biggest conglomerate of all times.
