Adani Enterprises Gets Board Approval to Raise Rs 16,600 Crore via QIP

Adani Enterprises has made a significant move to strengthen its financial position. On Tuesday, the company received board approval to raise Rs 16,600 crore through the qualified institutional placement (QIP) route. This method allows listed companies to raise funds by issuing equities to qualified institutional buyers.

Adani Enterprises received board approval to raise Rs 16,600 crore through QIBs

In a formal filing to the exchanges, Adani Enterprises, the flagship company of the Adani Group, announced that the board has approved the fund-raising initiative. The plan involves issuing equity shares with a face value of Re 1 each and/or other eligible securities in one or more tranches, not exceeding an aggregate amount of Rs 16,600 crore.

This announcement comes on the heels of a similar move by Adani Energy Solutions, another group company, which received board approval to raise Rs 12,500 crore through the QIP route just a day earlier.

Adani Enterprises’ stock price closed at Rs 3,244.35 per share, down 1.33% on the BSE on the day of the announcement. This fund-raising effort follows a challenging period for the company. In February 2023, Adani Enterprises had to call off its fully subscribed Rs 20,000 crore follow-on public offer (FPO) and return the money to investors after the US-based Hindenburg Research accused the group of stock manipulation and accounting fraud. The conglomerate denied these allegations, but the report led to heavy selling pressure on the stock exchanges, causing a 30-80% crash in the shares of Adani Group companies.

Despite these setbacks, Adani Enterprises and Adani Ports have bounced back, erasing the losses caused by the Hindenburg report. Adani Ports has even risen over 80% from its pre-Hindenburg report levels.

In terms of financial performance, Adani Enterprises reported a 39% drop in profit after tax (attributable to owners) to Rs 449 crore for the quarter ended March 31, 2024, down from Rs 735 crore in the same period the previous year. However, for the full fiscal year 2024, the company's profit after tax increased by 31% to Rs 3,240 crore compared to Rs 2,464 crore in FY23. Additionally, its total income saw a marginal rise of 1% to Rs 29,630 crore from Rs 29,311 crore in the quarter ended March 2023.

This fund-raising initiative via QIP is a strategic step for Adani Enterprises as it aims to bolster its financial health and support its growth ambitions.