Adani Group seeks to raise massive fund through qualified institutional placement
In a move to strengthen its balance sheet, flagship company of Adani Group has received approval to generate substantial capital from prominent investors. As per the latest board meeting decision, Adani Enterprises will raise up to Rs. 16,600 crores through qualified institutional placement or QIP mechanism.
QIP is a widely used method for listed firms to raise equity capital from qualified institutional investors in a expedited manner. The board of directors of Adani Enterprises gave a go ahead to issue appropriate number of shares and securities not exceeding the approved amount of Rs. 16,600 crores through this route in single or multiple tranches.
This fund raising plan comes within a day of another Group entity Adani Energy Solutions getting a similar nod to mobilize Rs. 12,500 crores via QIP. Stock price of Adani Enterprises closed marginally lower at Rs. 3,244.35 on the National Stock Exchange.
Earlier this year, the conglomerate had withdrawn its planned Rs. 20,000 crores follow-on public offer citing market conditions. The move came after allegations of undisclosed related party transactions and exaggerated cash balances in few Group companies by a short seller report, which were strongly refuted.
Post the report, shares of Adani portfolio firms witnessed significant sell-off bringing down their market value sharply for some time. However, stock prices of Adani Enterprises and Adani Ports have now recouped majority of the losses.
In the January-March quarter, net profit of Adani Enterprises was down 39% to Rs. 449 crores compared to same period of previous year. Full year net profit grew 31% to Rs. 3,240 crores.
