Adani Group CFO On FPO, Future Listings And Sector Forays
Adani Enterprises has set the floor price for the offer at Rs 3,112 per share for the FPO.
Adani Enterprises Ltd. opted for a follow-on public offering instead of raising funds via other instruments due to two reasons, according to Adani Group's Chief Financial Officer Jugeshinder 'Robbie' Singh.
"Firstly, we wanted to expand the shareholder register, to bring in new shareholders. An FPO allows us to increase the participation of the common Indian. It allows them to be a part of the wealth creation that Adani Enterprises is taking. It's important for our founder to reach as many people as we can," Singh said at a press conference a day after the company filed its red herring prospectus for the offer.
The FPO is "purely an action to facilitate the emergence of infrastructure and energy companies from Adani Enterprises", he said.
"Our fundraising today is a part of the 2015-16 capital management plan. Today, it is public markets; prior to this, fundraising was from strategic investors."
According to him, the company raises capital based on the requirement of the business.
"We can't make decisions based on short-term volatility aspects. We are not trying to maximise each market situation. Since 2015-16, we have raised capital based on business needs. We aim for long-term capital creation," he said.
There may also be some investors who have a specific mandate, Singh said. "Our obligation remains to our society because this is where we make our significant wealth. No investor should expect us to abandon the core interest of the society. We can be as good as India is."
Singh mentioned that "some of the mutual fund industry has missed the wealth creation of Adani firms".
"We are at fault that we could not reach out to them. We will reach out to them to make them understand the group."
On the Adani Group's exposure to coal amid rising concerns on ESG governance, Singh said all portfolio firms are credit-rated in line with sovereign ratings. "Our companies are rated high on ESG," he said.
Future Adani IPOs
Responding to a question, Anupam Misra, Adani Group's head of corporate finance and mergers & acquisitions, said the conglomerate will "hive off businesses when they mature and (are) independent financially". "Shareholders will get dollar for dollar shares in these incubated businesses", he said.
To this, Singh added that the group "broadly expects" all major entities currently incubated to be ready by 2026-29. The board will take final decision on these, he said.
According to Singh, the group is one year ahead of the 10-year plan. "We should be able to demerge them by 2024, instead of 2025-26."
Singh quashed chatter on the group's much-talked-about interest in the telecom sector. "We have no such plan in the telecom sector. We have have interest in digital, data centres," he said.
The group is also looking at entering the water sector, Singh said. "Water is the core element of Infrastructure. We will build and scale up this business. For now, we're looking at the water business from learning and evaluation businesses. We have no specific plans so far."
The discussion on how to complete the shareholder agreement with Total Energies for Adani New Industries is ongoing, he said. The leadership of Adani New Industries Ltd. will decide on the cash drawdown for this entity, according to him.
"We do not enter into a transaction because we need cash. It is based on value (that) a strategic partner brings in. The group is producing so much cash on the portfolio level. Our debt-to-Ebitda was 7 times in 2013-14, which is now at 3 times. We have delevered very fast," he said.
Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.