Three companies controlled by Adani Group founder Gautam Adani are considering a fundraising that could draw as much as US$5 billion, people familiar with the matter said, in a pivotal test of investor confidence in the tycoon’s empire less than four months after a scathing short-seller report plunged it into crisis.
Adani Enterprises Ltd, the flagship, as well as Adani Green Energy Ltd and Adani Transmission Ltd, could raise US$3 billion to US$5 billion to bolster the businesses, the people said, asking not to be identified as the information is private.
The boards of the three firms would meet today to consider raising funds through the sale of shares or other securities, exchange filings on Wednesday showed.
Photo: REUTERS
They did not disclose how much they intend to raise or who they are working with for potential deals. Adani Group stocks, which climbed on Thursday, were largely lower in yesterday’s early trading in Mumbai, India, as global index provider MSCI Inc said it would remove two companies from its India gauge.
The companies’ boards usually approve fundraising plans to enable management to quickly tap markets when opportunities arise.
Discussions are underway and there is no certainty that the companies would announce a sum they are looking to raise after today’s board meetings, the people said.
A representative for the Adani Group declined to comment on the fundraising details.
Any move by the Adani Group companies to tap a broader group of investors for funds could backfire if the market is not convinced that the cloud hanging over the stocks has lifted.
Despite the coal-to-cement conglomerate denying fraud allegations made by Hindenburg Research in January, the broadside triggered a weeks-long stock rout that wiped out more than US$100 billion of market value, forcing the billionaire to scrap a US$2.4 billion share sale by his flagship firm.
MSCI said that two Adani Group companies — Adani Transmission and Adani Total Gas Ltd — would be excluded from its India gauge at the end of this month.
Both stocks fell as much as 5 percent yesterday. Adani Enterprises erased its early gains and was trading 0.6 percent lower in Mumbai.
Removal from MSCI’s India gauge could lead to a combined outflow of about US$390 million from the two stocks, Smartkarma independent equities analyst Brian Freitas said.
Freitas, who predicted this exclusion, said the passive selling would keep the two stocks under pressure.
“Especially Adani Transmission, where there could also be some fundraising,” he added.
The Adani family in early March raised about US$1.9 billion selling shares in four firms to US investment firm GQG Partners, held investor roadshows and prepaid debt as they raced to bolster confidence and repair the damage from short seller’s accusations.
Adani company board meetings every year include proposing enabling resolutions to raise capital, which is part of their annual financial planning, the people said.
An analysis by Bloomberg of exchange filings showed that Adani Enterprises and Adani Transmission have sought board approval for fundraising every year in April or May since at least 2019.
Adani Green Energy secured such permission every year except in 2021, the data show.
The three firms raised almost US$2 billion from Abu Dhabi-based International Holding Company PJSC in April last year.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
RSS