The promoters of Adani Group on Wednesday raised around ₹9,000 crore by selling 8.1% of their holding in the energy-generation arm Adani Power Ltd, marking billionaire Gautam Adani’s largest equity capital-raising through a share sale in a single entity.
After amassing stakes worth at least ₹26,445 crore ($3.18 billion) in multiple Adani group firms through secondary market transactions since March, India-born Rajiv Jain-led investment management firm GQG Partners Llp bought an additional stake worth over $1.1 billion from the promoters of Adani Power.
“This is the largest ever secondary equity transaction with GQG Partners,” said a person directly aware of the development.
As of 30 June, promoter entities, including Adani Tradeline Pvt. Ltd owned 9.78% of Adani Power; Worldwide Emerging Market Holding Ltd held 5%; Flourishing Trade and Investment Ltd owned 11.46%; Afro Asia Trade and Investments Ltd held 6.88%; and Emerging Market Investment Dmcc had 4.99%.
Gautam Adani’s family trust (including Gautam Adani and Rajeshbhai Shantilal Adani) is the largest promoter group in the firm, with a 36.86% stake.
In Wednesday’s block deals, Afro Asia Trade and Investments sold its entire 6.88% and Worldwide Emerging Market Holding (another promoter entity) sold 1.2% to GQG Partners’ entities.
Adani Power, with a market value of about ₹1.1 trillion and over 15,250 megawatts (MW) of installed power generation capacity, is the country’s largest privately held power firm.
“This historic trade marks the largest ever block deal between a single buyer and a single seller in Indian history…the success of this investment programme underscores the group’s unparalleled ability to raise substantial funds seamlessly across all its portfolio of companies,” a company official said on condition of anonymity.
The latest stake sale in Adani Power follows several similar capital-raising moves by the group’s promoters after US-based short-seller Hindenburg Research accused the group of being involved in brazen stock price manipulation and being over-leveraged in a 24 January report.
“As a fund, they’re (GQG Partners) taking an interest in India’s infrastructure story. If somebody is looking at the infrastructure build, there are value investing opportunities, considering the correction in Adani Group stocks. Maybe the fund manager is finding value here. They are investing in energy and other companies’ stocks as well,” said Sudip Bandyopadyay, group chairman of Inditrade Capital Ltd.
Just a week ago, the promoters raised $500 million by selling a part of their holdings in the renewable energy-producing firm Adani Green Energy Ltd to investors, including INQ Holding Llc, a wholly owned unit of sovereign fund Qatar Investment Authority (QIA).
Since 2 March, the promoters of Adani Group have raised at least $4.5 billion by selling shares in several group firms after the Hindenburg report forced the group’s listed flagship Adani Enterprises Ltd to call off its ₹20,000 crore fundraising plan in February.
The promoters’ fundraising efforts are aimed at paring promoter-level debts, paying off creditors to get promoter share pledges released to lower leverage levels and to fund the group’s revived capex plans.
At current market prices, around ₹31,000 crore is required by the group promoters to release pledges of their shares in five key listed group firms. Additionally, shares worth $7.18 billion are pledged by the promoters of Ambuja Cements Ltd and ACC Ltd.
An energy expert said that India stands at a crucial juncture, balancing its colossal energy demands with global sustainability commitments.
On 17 April, Mint reported that the Adani group paid back at least $3 billion in the March quarter, lowering promoter-group pledges and settling bonds with three domestic mutual funds to ease the concerns of investors and creditors.
GQG has been steadily increasing its stake across the Adani group ever since the Hindenburg report led to a steep fall in the stocks of Adani Group firms.
On 2 March, GQG invested $1.87 billion across flagship Adani Enterprises ($660 million), Adani Ports ($640 million), Adani Transmission ($230 million) and Adani Green Energy ($340 million).
“Within five years, we would like to be one of the largest investors in Adani Group, depending on the valuation, after the family,” Jain told Bloomberg in a recent interview.
Adani Group promoters have managed to clinch several large stake-sale deals even as the country’s market regulator, the Securities and Exchange Board of India (Sebi), is to conclude its probe Supreme Court-directed probe into the group for possible round-tripping of funds via overseas entities.