Jefferies noted that Adani Green has gross debt of Rs 47,400 crore and net debt of Rs 40,500 crore, with net debt-to-equity at 5.4 times. Adani Green Energy, controlled by billionaire Gautam Adani, will seek board approval to raise Rs 6,150 crore to Rs 8,200 crore through the qualified institutional placement (QIP) route, a report in The Economic Times stated.
Earlier this month, two group companies, Adani Enterprises and Adani Transmission, had got the approval of their boards for fundraising, which was Rs 12,500 crore and Rs 8,500 crore, respectively.
The Adani Group companies have been floating their fundraising plans five months after a report from US-based short-seller Hindenburg Group battered investor confidence. The current exercise is part of a group plan outlined internally in 2022 to build a “three-year equity cushion” to support expansion plans.
A QIP is a capital-raising method, which can be adopted by a publicly-traded firm, wherein it can issue equity shares, fully and partially convertible debentures, or any other security convertible into equity shares other than warrants. A QIP, unlike an IPO, is limited to institutions or qualified institutional buyers.
According to Bloomberg News, Adani Green has got approval for such capital-raising activities every year from its board except in 2021.
The fund raised by Adani Green Energy will be used to repay an outstanding $750 million, three-year bond issued in 2021 that's due next year. The money is likely to be saved in a dedicated redemption reserve account and paid on the due date, the report said.
At the end of March 2023, Adani Green had net debt of Rs 51,221 crore that it had taken to finance growth. As per a report in Mint, the company intends to repay its Rs 45,436 crore of long-term debt in instalments through FY33. Around Rs 39,600 crore of the company’s debt is linked to the operational capacity, while the balance is upcoming.
In FY25, Adani Green has a major repayment due of Rs 22,454 crore coming up, including repayments towards borrowings planned to be refinanced of Rs 21,167 crore.
Adani Green is also planning to set up the world’s largest hybrid cluster project of 15 GW across 70,500 acres in Khavda, Gujarat.
Brokerage firm Jefferies expects Adani Green’s revenue to rise from Rs 7,792 crore to Rs 10,700 crore by the end of FY24, with an estimated operating profit of Rs 8,178.3 crore during the fiscal year.
On the other hand, Adani Green is also trying to decide on the terms of its agreement with French firm TotalEnergies for the $4 billion investment proposal in a green hydrogen venture. The MoU for the agreement was signed in 2022.
After the Hindenburg Research report was out, Total had said it is pausing the plan in the wake of the report. Total had said it won't immediately proceed with the plan, where it had a 25 per cent stake in Adani New Industries Ltd (ANIL), a subsidiary of Adani Enterprises, controlled by Adani.
The Adani Group had lost over $140 billion in market value after the Hindenburg report, which was released on January 24. The conglomerate was also forced to call off its follow-on public offering (FPO) in February. In the last two weeks, Adani Group has kicked off various fund-raising plans, expecting to emerge clean in a regulatory probe over allegations of stock price manipulation.