Abu Dhabi's IHC to invest $400 mn in Adani Enterprises' follow-on offer

Investor says it has 'confidence and belief in the fundamentals of Adani Enterprises'

Abu Dhabi's International Holding Company (IHC) has said it will invest $400 million in the further public offering (FPO) of Adani Enterprises, boosting the Indian conglomerate’s share sale plan as it battles US short seller Hindenburg Research.

IHC will make the investment through its subsidiary, Green Transmission Investment Holding RSC Ltd. The investment comes on a day when Adani Enterprises' shares recovered after two days of bear hammering to close 4 per cent up at Rs 2,870 a share on Monday. The FPO plans to raise Rs 20,000 crore and will close Tuesday. Hindenburg’s report last week pulled down the group's shares in the last two trading sessions.

"Our interest in Adani Group is driven by our confidence and belief in the fundamentals of Adani Enterprises; we see a strong potential for growth from a long-term perspective and added value to our shareholders," said Syed Basar Shueb, chief executive officer of IHC in a statement. IHC's first investment of the year comes as it diversifies its bets, focusing on Europe, Africa, Asia, and South America markets in 2023.

This is the second deal IHC has completed in the Adani Group, after last year's $ 2 billion investment in three green-focused companies: Adani Green Energy, Adani Transmission, and Adani Enterprises.

"The advantage of the FPO is the historical reference for the company's earnings report, company's management, business practices, and much data to bank on before making any investment decision," said Shueb in a statement.

IHC was founded in 1998 as part of an initiative to diversify and develop non-oil business sectors in the UAE and has grown to become the most valuable listed holding company in the Middle East with a market cap of AED 648 billion as of Sep 30, 2022.