Adani family to sell around 3% stake in Ambuja Cements on Friday

Plans to raise up to Rs 4,197 cr via block deals

The billionaire Adani family is planning to sell around 3 per cent of their stake in India’s second-largest cement firm Ambuja Cements to raise up to $500 million (Rs 4,197 crore) via block deals on Friday, as per the terms of the transaction. The family currently owns 70.33 per cent stake in Ambuja Cements, which they acquired from Swiss materials firm Holcim in May 2022.
 

Reports also suggest that the family may look at selling a small shareholding of between 0.5 per cent and 3 per cent in Adani Power.

The sale of the shares of Ambuja Cements is part of the family’s plan to manage and balance their $125-billion-strong portfolio (including unlisted companies), accelerate investments across group companies and induct long-term sovereign fund investors, who are looking to invest in India's growth story, banking sources said.

 

According to the term sheet, Ambuja Cements’ shares are being offered at 5 per cent discount to the company’s closing share price of Rs 632 on Thursday.

The Adani group did not comment on the imminent block deals.

As regards Adani Power, reports said that the family, which owns 71.71 per cent stake in the electricity generation firm, may offload a small amount of shares — between 0.5 per cent and 3 per cent — to induct global investors. However, a source privy to the development said that no decision on this has been taken so far.

“Most of the group shares are trading at 52-week highs and there is a demand from investors to invest large sums — for example $300 million — in the group stocks and remain invested for long term. So, we will look at all options,” the source said.

While Adani Power has gone up by 28.4 per cent since January 1 this year to close at Rs 674 a share, the shares of Ambuja Cements are up 21.5 per cent to close at Rs 632 a share on Thursday.

In the recent past, several long-term investors, including sovereign wealth funds like Qatar Investment Authority and GQG Capital, have invested in the group’s shares, with the most recent example being Adani Energy Solutions QIP (qualified institutional placement) where the entire green shoe option was exercised as demand was high, the source said.

The family wants to accelerate investments across group companies as they are in expansion mode with plans to invest $100 billion in the next decade. Hence, such portfolio balancing and churning will keep happening, the source said. The group will be investing $21 billion in the airport business and plans to list the business by FY28. The airport company is currently housed under Adani Enterprises Limited (AEL).

The above fundraise by the family is separate from the share sale via QIP planned by group flagship AEL to raise Rs 16,790 crore ($2 billion) in September.

During roadshows in the last few weeks, the group’s top officials met investors across the world and received good response for the share sale, said another source close to the development. Early this month, Adani group company Adani Energy Solutions (AESL), an electricity transmission firm, successfully raised Rs 8,373 crore ($1 billion) via a QIP — the largest in India's power sector. The QIP was AESL’s first equity raise in the capital market since its demerger from AEL in July 2015.

AEL will be using the funds for its new projects as it expands capacity across its portfolio companies. Among its portfolio companies, Adani Green Energy will invest Rs 34,000 crore to expand its facilities in Gujarat’s Khavda alone.

The group recently shared June quarter financial performance of its listed companies and announced an Ebitda surge of 32.87 per cent year-on-year (Y-o-Y) to reach Rs 22,570 crore, resulting in a trailing twelve-month (TTM) Ebitda of Rs 79,180 crore, marking a 45.13 per cent increase over the corresponding TTM of the previous year. The rise in Ebitda is largely driven by the group’s stable and resilient “core infrastructure” platform, which constitutes over 80 per cent of the portfolio Ebitda and saw a remarkable 41.6 per cent growth Y-o-Y in the June quarter.

AEL’s infrastructure businesses — utility (Adani Green Energy, Adani Power, Adani Energy Solutions and Adani Total Gas) and transport (Adani Ports & SEZ) — played a significant role in this growth, with Ebitda expanding by 70 per cent on a Y-o-Y basis.