Adani Group to sell shares to repay debt; plans to raise ₹21,000 crore through QIP

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Adani Group’s companies, burdened by debt and the impact of the Hindenburg Research report, have devised a plan to raise ₹21,000 crore to repay debts. The group’s flagship company, Adani Enterprises, aims to raise ₹12,500 crore, while Adani Transmission plans to raise ₹8,500 crore. This money will be raised through Qualified Institutional Placement (QIP). Adani Enterprises and Adani Transmission shared this plan with the stock market on Saturday.

QIP is a method of raising capital for listed companies, where listed companies issue shares to institutional investors to raise funds. In this case, Adani Group will issue shares to mutual funds, banks, insurance companies, and foreign institutional investors through QIP in exchange for raising capital. Retail investors cannot participate in QIP.

The plan to raise capital is not limited to just Adani Enterprises or Adani Transmission; other companies within the group can also raise capital through QIP. Adani Green’s board meeting is scheduled for May 24, 2023 where a decision on raising funds through QIP may also be made.

Adani Group carries a heavy burden of debt, with a total debt of ₹2.27 lakh crore on its group companies by the end of March this year. Following the Hindenburg Research report, there has been a significant decline in Adani Group’s share prices. Since January, Adani Group has been making efforts to reduce its debt burden in order to stabilize the share prices and prevent the impact on the companies’ operations. In January, the group had announced a ₹20,000 crore Follow-on Public Offering (FPO) to raise capital. However, after the sharp decline in share prices, Adani Group decided to withdraw the FPO to maintain investor confidence.

Now, the group has decided to raise capital through a fresh approach and has chosen the QIP route. However, the decision to raise capital through QIP comes at a time when the capital market regulator is investigating the Adani Group and the Hindenburg case after the Supreme Court’s orders.