Adani Enterprises Is Raising Funds To Back $150-Billion Investment Plan
Adani Group flagship to raise Rs 20,000 crore through an FPO to fund future investments and keep the balance sheet deleveraged.
Billionaire Gautam Adani's flagship company, Adani Enterprises Ltd., will raise Rs 20,000 crore ($2.5 billion) through a further public offering in an effort to fund future investments and keep the balance sheet deleveraged.
Adani Enterprises had non-current borrowing of Rs 26,337 crore and current borrowing of Rs 13,687 crore as of September, according to its disclosures. That includes debt sourced from promoter entities to the tune of over Rs 12,000 crore.
Adani Enterprises said in its recent presentation that for FY23, its liquidity position before discretionary capex stood at Rs 14,788 crore. Adjusted for discretionary capex, it was Rs 6,925 crore.
The group has lined up investments worth $125–150 billion over the next five to 10 years across sectors led by green hydrogen and green energy, where the group is expected to invest $70–93 billion during the period.
The Fundraise
The planned fundraising by Adani Enterprise is expected in early 2023 once shareholder approval via postal ballots is complete. It plans to raise Rs 20,000 crore through a further public offering, which could dilute its equity by 4-5% based on the current market value, according to BQ Prime's calculations.
Adani Enterprises, which currently has a debt-to-equity ratio of 2.3 times, will see that decline by the end of the financial year to sub-1.5 times. The equity raising will help the company fund investments planned for the next few years, with peak capex seen in the immediate two- to three-year period.
Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.