Adani group seeks $1 bn funding from sovereign fund for airport expansion

Adani Enterprises launched a qualified institutional placement (QIP) aiming to raise up to Rs 4,200 crore ($500 million), lower than planned due to market fluctuations

The Adani Group is in advanced discussions with a Middle Eastern sovereign fund to raise up to $1 billion for its airports division, according to a report by The Economic Times.

These fundraising efforts coincide with Adani Enterprises’ launch of a qualified institutional placement (QIP) on Wednesday, aiming to secure up to Rs 4,200 crore ($500 million), which is lower than initially targeted due to global market fluctuations, the report said.

Along with the base size of $500 million, the QIP includes a greenshoe option for an additional $500 million, with a decision on this expected by Thursday. The conglomerate, based in Ahmedabad, plans to raise capital for Adani Airport Holdings in two phases, with the first round likely to be secured from the sovereign fund by the end of this quarter, though the fund’s name has not been disclosed, the report further said.

In light of these developments, the group has scaled back its initial QIP target from $2 billion.

The Economic Times quoted a source saying that the company is also aiming for the flexibility to raise part of the funds next year for its airports business, which is fully owned by Adani Enterprises. The QIP has already attracted soft orders exceeding $650 million. On Wednesday, the company announced it would offer a discount of up to 5 per cent on the issue’s floor price.

The term sheet specifies the indicative floor price for the QIP at Rs 2,962 per share, representing a 6 per cent discount from the stock’s closing price of Rs 3,152.90 per share on Wednesday at the BSE. A total of 14.2 million shares will be issued, with Jefferies, ICICI Securities, and SBI Capital serving as the transaction’s bankers.

Adani Enterprises, which oversees the group’s operations in airports, roads, and data centers, has outlined a capital expenditure of Rs 80,000 crore for this financial year. Of this, Rs 50,000 crore is earmarked for the airports business and Adani New Industries. Adani Airports, which operates seven airports and is constructing another in Navi Mumbai, has planned an investment of $21 billion over the next decade, according to group CFO Jugeshinder Singh, as mentioned by the report.

Since entering the airports sector in 2019, Adani has become the largest private airport operator in India, the report said.