After Adani Energy, Adani Enterprises to raise ₹16,600 cr via QIP

Leaving the Hindenburg saga behind, Gautam Adani-led Adani group today said the board of Adani Enterprises Ltd has approved fundraising of ₹16,600 crore via the QIP route.

"The Board of Directors of the Company (the “Board”), at its meeting held today, i.e. 28th May 2024, commenced at 10:30 a.m. and concluded at 11:00 a.m., has approved raising of funds by way of issuance of such number of equity shares having face value of ₹1 each of the company and/or other eligible securities or any combination thereof for an aggregate amount not exceeding ₹16,600 crore or an equivalent amount thereof by way of qualified institutional placement (“QIP”) or other permissible mode in one or more tranches," Adani Enterprises says in an exchange filing.

The development comes a day after Adani Group's power arm, Adani Energy Solutions Ltd, said its board has approved fundraising of ₹12,500 crore via QIP.

Last year, Adani Enterprises had to withdraw its ₹20,000-crore follow-on public offer (FPO) after the release of a controversial report by the U.S.-based investment firm Hindenburg Research, which alleged that key listed Adani firms had taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing. This led to a sharp selling in the Adani group shares, wiping out around $100 billion from its m-cap.

Today, the Adani Enterprises stock is trading down 0.81% in line with the market benchmark BSE Sensex, which is down 0.12%. At the current share price of ₹3,261.80, the stock is trading down 5.6% compared to the 52-week high of ₹3,456.25 touched on May 24, 2024, and the company's m-cap stands at ₹3,72,210.37 crore.

The Adani Enterprises stock has risen around 28.88% in the past year, while its year-to-date, six months and one-month returns are 11.96%, 34.78%, and 6.01%, respectively.

The company's net profit had plunged 38% year-on-year to ₹450 crore for the quarter ended March 31, 2024, compared with ₹772.48 crore in the corresponding quarter last year. It posted ₹1,888.45-crore profit in the previous quarter. Revenue increased 0.8% to ₹29,180.02 crore against ₹28,943.84 crore in the year-ago quarter.

The company’s operating costs jumped 31% year-on-year to ₹9,324 crore in Q4 FY24 from ₹7,118 crore in Q4 FY23. The cost of materials consumed more than doubled year-on-year to ₹2,824 crore during the fourth quarter from ₹1,324 crore in the year-ago period.

For the full financial year 2023-24, Adani Enterprises reported a 32% jump in consolidated EBITDA to ₹13,237 crore while profit before tax (PBT) increased 56% to ₹5,640 crore.

Notably, soon after the release of the Hindenburg report last year, around $100 billion was wiped off from the cumulative market capitalisation of the Adani Group companies. The SC in January 2024 concluded its judgement on a series of petitions by U.S.-based short-seller Hindenburg Research, saying SEBI is the ultimate authority to probe the allegations. The apex court also directed SEBI to probe if Hindenburg's actions violated any laws, which ultimately resulted in losses to investors.

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