Adani Enterprises Ltd. is seeking to raise as much as 100 billion rupees ($1 billion) through a sale of shares to institutional investors as the ports-to-power conglomerate led by billionaire Gautam Adani overcomes legal challenges in the US.
The firm opened the qualified institutional placement on Thursday and aims to offer as many as 34.7 million shares to large investors. They will be sold at an indicative price of 2,883 rupees apiece, terms of the deal obtained by Bloomberg News showed. The pricing is at a 9% discount to the stock’s Thursday close of 3,177.50 rupees.
The company’s capital raising follows an agreement to pay $275 million to settle a probe by the Office of Foreign Assets Control in May. Separately, its founder Gautam Adani and his nephew Sagar agreed to pay $18 million to the US Securities and Exchange Commission over allegations related to misleading representations about Adani Green Energy.
India Pvt., SBI Capital Markets Ltd., ICICI Securities Ltd. and IIFL Capital Services Ltd. are the book running lead managers for the deal, which has the option to increase in size.
The company seeks to use the proceeds for funding capital expenditure requirements of its units such as setting up a polyvinyl chloride plant as well as payment of concession fees for a road project. It may also use the funds for reducing debt of its solar, airport and copper units.
Most of companies’ shares have rallied this year. Power, green energy and energy solutions units have added more than 50% each this year, while the flagship firm has gained 42%, significantly outperforming the broader Indian equity market.
Earlier on Thursday, Adani Enterprises and Abu Dhabi’s International Holding Co. announced a plan to invest $11.5 billion in an aluminum project in the eastern state of Odisha, further boosting the Indian conglomerate’s ambitions to expand its presence in the metal sector.