Stay informed with free updates
Simply sign up to the Indian business & finance myFT Digest — delivered directly to your inbox.
Adani Group’s power transmission and distribution arm raised $1bn in an equity sale, the first since the Indian conglomerate canned a share placement after being hit by damaging corporate fraud allegations.
Demand for Adani Energy Solutions’ Rs83.7bn qualified institutional placement was six times above the base deal size, the company said on Monday.
Major buyers included INQ, a subsidiary of Qatar’s sovereign wealth fund, as well as Citigroup, Nomura and Indian mutual fund SBI.
Adani Energy Solutions, which operates and is constructing more than 21,000 circular kilometres of power lines, said it would use the share sale proceeds in several ways including to pay down debt and invest in its smart metering business.
“The strong interest from institutional investors reflects their commitment to and belief in India’s energy transition, in which Adani Energy Solutions [Limited] plays a pivotal role,” said Kandarp Patel, AESL chief executive.
“India’s robust investment cycle and rising power demand are positive indicators for the power sector.”
The share sale is part of an ongoing effort by Adani Group founder Gautam Adani, India’s second-richest tycoon, to move on from a range of scandals that dented his eponymous infrastructure empire, which spans ports, power and cement.
Adani Group is expanding rapidly across its mainstay businesses and has increasingly diversified into new sectors, from data centres, media and consumer finance.
Those moves were initially paused after US short seller Hindenburg Research last year made wide-ranging allegations that the conglomerate engaged in “brazen” fraud and market manipulation.
The publication of Hindenburg’s extensive report into the company caused a roughly $140bn sell-off across Adani’s listed stocks, as well as political attacks on the tycoon’s perceived cosy relationship with Prime Minister Narendra Modi.
The stock price collapse also prompted the conglomerate’s flagship business incubator Adani Enterprises to halt a $2.5bn share placement.
The group has repeatedly denied any wrongdoing and shares across its public companies have largely since recovered.
Adani, who has openly tied his business interests to Modi’s development agenda that aims to build out India’s once decrepit national infrastructure, spent much of the past year deleveraging its debt-laden companies following Hindenburg’s broadside.
The group, which has extensive business interests in coal, is also at the forefront of India’s renewable energy drive, which aims to more than double green generation in the coal power dependent country to 500 gigawatts by 2030.
Analysts at investment bank Jefferies last month said Adani Energy Solutions had lost market share in the past financial year thanks to the conglomerate’s “financial consolidation” and “tad aggressive” transmission sector bidding.
However, they expect the company to recover as Adani’s management looks to spend about $100bn on energy transition and digital infrastructure over the next decade.
