Abu Dhabi funds, Hinduja group could invest in Adani firms' share sale

Shares worth up to Rs 29,000 crore of three group companies could be put up for sale

With the Adani group shares making a sharp recovery after the Supreme Court panel report, several high-profile investors, including Abu Dhabi Investment Authority (ADIA), International Holding Company (IHC), GQG Partners, and the Hinduja group have shown interest to invest in the forthcoming share sale of group companies, investment banking sources said.

The Adani group is slated to go for the share sale of up to Rs 29,000 crore.

ADIA was the anchor investor in the flagship Adani Enterprises’ (AELs) share sale of up to Rs 20,000 crore in January this year.  However, the share sale was scrapped after US-based short seller Hindenburg Research made allegations against the group.

Hindenburg had also took short-selling positions in US-based securities of the group. The Adani group had vehemently denied the allegations and instead focused on pre-paying debt.

“The quantum of investment by each investor will be decided at the time of share sale but many international investors have sent feelers to invest in the share sale,” said a banker.

In April last year, IHC had invested $2 billion as primary capital in Adani Green Energy (AGEL), Adani Transmission (ATL) and AEL. IHC had invested an additional $400 million in AEL share sale in January but the funds were returned by the group after the company withdrew the offer.

Riding the tide

• Global firms keen to invest in cash flow-backed assets 
• Favourable SC panel report improves investor sentiment
• Pre-payment of debt by Adani group helps restore confidence
• Group to focus on completing ongoing projects; to avoid acquisitions for now

GQG Partners, a US-based asset management fund, also plans to invest more in the share sale but did not quantify the amount, according to a Bloomberg report.

On March 2, the Adani family had sold shares worth Rs 15,446 crore to GQG Partners, in four group companies. It used the proceeds to prepay debt, resulting in group shares stabilising. GQG later invested an additional $400 million (Rs 3,280 crore) by buying Adani group shares from the market. 

GQG, which is sitting on a hefty Rs 10,000-crore profit on its March 2 investment as of Tuesday (May 23), is also planning to invest more but the exact amount is not decided as yet.

Besides Adani Ports, a listed firm, pre-paid debt of $130 million to boost investor confidence.

The boards of group companies AEL and ATL have cleared plans to raise up to Rs 21,000 crore in fresh fundraise. Adani Green, whose board is yet to meet, is planning to raise another Rs 8,000 crore, bankers said.

An Adani group spokesperson declined to comment. Mails sent to IHC, ADIA, GQG, and the Hinduja group did not elicit any response.

Since the Hindenburg report was made public, Adani group executives held several road shows in the UK, Hong Kong and Singapore to convince investors about their future plans.

Some of the investors have been invited to visit the group's sprawling port project in Mundra, Gujarat. The group has also slowed down on its acquisitions. It is focusing on completing its ongoing mega projects, including the new Mumbai airport and the 464-km Ganga expressway in Uttar Pradesh.