Adani Enterprises declines 3% after launching Rs 16,000-crore QIP issue

The company's board had approved a total fundraising of Rs 16,600 crore by the way of QIP or other modes in one or more tranches, on May 23, 2024.

Shares of Adani Enterprises (AEL) has dipped 3 per cent to Rs 3,065.30 on the BSE in Thursday’s intraday trade after the company announced the launch of a qualified institutional placement (QIP) offer, at a floor price of Rs 3,117.48 per share, on Wednesday.

Thus far in calendar year 2024, Adani Enterprises, the flagship company of Gautam Adani-led Adani group, has underperformed the market by gaining 5 per cent. In comparison, the BSE Sensex has rallied 13 per cent during the same period.

The stock has corrected 18 per cent from its 52-week high level of Rs 3,743.90 that it touched on June 3, 2024. It had hit a record high of Rs 4,189.55 on December 21, 2022.

On May 23, 2024, the company's board had approved a total fundraising of Rs 16,600 crore by way of a QIP issue or other permissible methods, in one or more tranches.

"The board may, at its absolute discretion and in consultation with the lead managers / book running lead managers, also offer a discount of not more than 5 per cent or such other percentage as may be permitted under applicable law to the QIP floor price subject to the approval of the shareholders of the company by way of a special resolution," the company had said in its FY24 annual report.

AEL, in its draft placement document, said the company proposes to utilise the net proceeds from the fundraise towards funding capital expenditure requirements of some of its subsidiaries in relation to certain projects under the new energy ecosystem, apart from improvement works and city-side development works planned for certain existing airport facilities.

The company also plans to spend a part of the proceeds from the fundraise towards the construction of a greenfield expressway, and setting up a polyvinyl chloride (PVC) plant.

AEL also plans to utilise some of the net proceeds for the repayment/ pre-payment, in full or in part, of certain outstanding borrowings of one of its subsidiaries, namely, Adani Airport Holdings; apart from general corporate purposes.

Meanwhile, Adani Enterprises has witnessed a substantial improvement in the performance of its solar (that is, Adani New Industries Limited (ANIL) ecosystem) division.

Apart from that, the company has also seen strong progress in under-construction projects across the road and airport segments, which in CARE Ratings’ opinion, are likely to sustain over the medium-term backed by favourable demand prospects for each of the underlying sectors.

In the June 2024 quarter (Q1FY25), ANIL Ecosystem's solar manufacturing and wind turbine businesses recorded their highest ever earnings before interest, tax, depreciation and amortisation (Ebitda), at Rs 1,642 crore, with an increase of 3.6x on year-on-year (YoY) basis.

It now contributes 38 per cent to the total Ebitda of the company, on the back of its robust operational performance.

With ANIL aiming to become a global leader in cost-effective, scalable and reliable platform for developing large scale green Hydrogen and derivatives products, it intends to create a large-scale integrated ecosystem by levaraging the group's expertise in ports, logistics, EPC, and mega-scale project development.

"Hydrogen demand is increasing globally due to its potential to support the transition to a low-carbon economy. It is seen as a versatile energy carrier and a key element in reducing greenhouse gas emissions," the company said in its annual report.