Adani Enterprises raises ₹4,200 cr via QIP; here’s how the stock reacts

Shares of Adani Enterprises dropped nearly 1% in opening trade on Friday even after the Adani group company informed exchanges that it raised ₹4,200 crore ($500 million) via qualified institutional placement (QIP) route to support its growth plans. The proceeds from the QIP will be utilised for funding capital expenditure, debt repayment and general corporate purposes, the Adani group flagship said in a regulatory filing.

Extending previous session losses, Adani Enterprises shares declined as much as 0.9% to ₹2,984.85, while the market capitalisation slipped to ₹3.44 lakh crore. The largecap stock opened lower at ₹2,998.95 after ending down by 2.38% at ₹3,012.20 in the previous session on the BSE. 

The Adani group stock touched its 52-week high of ₹3,743 on June 3, 2024, and a 52-week low of ₹2,142.30 on November 20, 2023. The stock has given 24% returns in the last one year, while it lost nearly 2% in six months. In the calendar year 2024, the counter gained 2%.

In an exchange filing last evening, Adani Enterprises said that it completed the QIP of 1.42 crore equity shares worth ₹4,200 crore at an issue price of ₹2,962 apiece. The stocks were issued at a discount of 4.99% from the floor price of ₹3,117.475 per share. Quant Mutual Fund was the largest investor in the QIP, buying 47% of the total issue size. Among others, Winro Commercial (India) Ltd picked 12.5% of the shares, followed by Tree Line Asia Master Fund (Singapore) Pte Ltd (5.95%), and SBI Life Insurance Co Ltd (5.06%).

“Adani Enterprises Limited (AEL) has successfully completed the QIP of equity shares of face value of ₹1 each of AEL aggregating to approximately ₹4,200 crore ($500 million). A total of 1,41,79,608 equity shares were allocated at an issue price of ₹2,962 per equity share through the QIP,” the release highlighted.

The QIP opened for subscription post-market hours on October 9 and closed on October 15, 2024. The issue garnered an overwhelming demand, receiving bids of approximately 4.2 times of the deal size from a diverse group of investors, including global “long-only” investors, major Indian mutual funds, and insurance companies.

“This milestone underscores AEL’s position as India’s largest listed incubator of scalable and large businesses in core infrastructure which addresses the needs of India,” the release noted.

In May this year, the board of Adani Enterprises had approved fundraising of ₹16,600 crore via the QIP route. The announcement was made shortly after Adani Group's power arm Adani Energy Solutions’ board gave nod for fundraising of ₹12,500 crore through the QIP.

In August this year, Adani Energy Solutions completed its ₹8,373 crore ($1 billion) QIP, the largest in India's power sector. This was AESL’s first equity raise in the capital market since its demerger and listing from AEL in July 2015. The company intended to use QIP proceeds for investment in transmission assets, smart metering business, and debt repayment.

For the first quarter ended June 30, 2024, AEL reported robust earnings on the back of strong performance by core infra businesses comprising ANIL ecosystem, airports, and roads. The billionaire Gautam Adani-led company also announced the demerger of the food FMCG business of AEL to Adani Wilmar to unlock value for its shareholders.

For Q1 FY25, Adani Enterprises posted a 115.8% jump in its consolidated net profit to ₹1,454.5 crore as compared to ₹673.9 crore in the year ago period. The consolidated revenue from operation increased by 12.4% year-on-year (YoY) to ₹25,472.4 crore in Q1 FY25. The EBITDA surged by 48% to ₹4,300 crore versus ₹2,897 crore in the corresponding period last year.

AEL's current incubation portfolio includes airports and roads in the transport and logistics sector, new energy ecosystem (including solar and wind manufacturing) and data centres in the energy and utility sector. Its other businesses including copper, PVC, defense and specialised manufacturing, focus on import substitution and addresses India's vision of Atmanirbhar Bharat.

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