 "Adani Energy stock zooms 18% in 3 days on buzz of strong demand for its QIP")
Shares of Adani Energy Solutions (formerly known as Adani Transmission) surged 9 per cent to Rs 1,236.70 on the BSE in Thursday’s intra-day trade, extending its previous two-day upward move after launching its qualified institutional placement (QIP) issue on Tuesday, July 30.
In the past three days, the stock of Adani Group’s power distribution company has surged 18 per cent. It had hit a 52-week high of Rs 1,250 on January 3, 2024. The stock had hit a record high of Rs 4,238.55 on September 16, 2022.
Adani Energy Solutions (AESL), part of the Adani portfolio, is a multidimensional organization with presence in various facets of the energy domain, namely power transmission, distribution, smart metering, and cooling solutions. AESL is ramping up its smart metering business and is on course to become India’s leading smart metering integrator with an order book of over 22.8 million meters.
The board of AESL had approved the QIP offering on July 30, with a floor price of Rs 1,027.11 per share, according to a stock exchange filing.
The company proposes to utilise the net proceeds towards funding capital expenditure requirements of some of its subsidiaries in relation to setting up transmission systems; funding capital expenditure requirements of some of its Subsidiaries in relation to purchase and installation of smart meters; repayment / pre-payment, in full or in part, of certain outstanding borrowings availed by its company and/or some of its subsidiaries; and general corporate purposes.
According to reports, AESL’s $1-billion QIP got strong response and was subscribed over 6 times.
“Global investors including GQG, ADIA and domestic institutions Bandhan Mutual fund, Nomura were some of the participants,” the Business Standard reported quoting sources.
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Duquesne Family Office, the fund founded by billionaire investor Stanley Druckenmiller, and two other US-based long-only funds - Driehaus Capital Management and Jennison Associates - have invested in the qualified institutional placement (QIP) of AESL, Economic Times reported on market sources.
Meanwhile, the management said AESL remains steadfast with commissioning of new lines, along with strong energy demand growth in its distribution areas of Adani Electricity Mumbai (AEML) and Mundra (MUL). The company is further contributing to decarbonization of the power distribution in Mumbai by way of 37 per cent renewable power penetration in Mumbai, the management said.
AESL in its FY24 annual report said, executing smart meter installation and generating revenue will be a key focus area in FY 2024-25. The company will actively participate in the upcoming major tenders, aiming to maintain its market share. The company is further focussing on the digitisation of business processes with data analytics and AI technologies to drive operational efficiencies as well as exploring new opportunities related to metering like gas meters and home automation.
AESL further said that the company is well-placed to capture future growth through multiple avenues. The company has robust under-construction pipeline worth Rs 17,000 crore in Transmission and Rs 27,195 crore in Smart Metering and strong growth potential in the Smart Metering business. The company has annual capex plan of Rs 5,000 to Rs 7,000 crore of which Rs 1,300 crore to Rs 1,500 crore to grow regulatory asset base (RAB) at AEML business. In distribution, expansion into newer geographies through parallel licenses (Navi Mumbai, Greater Noida, Mundra Taluka).