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The Adani Group, led by billionaire Gautam Adani, has successfully navigated a turbulent period marked by the controversial Hindenburg Research report. In a significant development, Adani Energy Solutions Ltd, a power transmission unit within the conglomerate, has raised a substantial USD 1 billion through a qualified institutional placement (QIP) issue. This marks the first public equity raise by the Adani Group since the Hindenburg report, which sent shockwaves through the market and resulted in a significant erosion of shareholder value. The QIP, which commenced on Tuesday, saw an overwhelming response, with demand exceeding the supply by a factor of three. The total demand amounted to a staggering ₹26,000 crore, making it the largest transaction ever recorded in India's energy sector.
The QIP closed at ₹1,135 per share, exceeding the issue price of ₹976 per share, indicating a 14 per cent listing discount. This successful fundraising endeavor serves as a strong indicator of investor confidence in the Adani Group, despite the recent challenges. Sources with direct knowledge of the matter revealed that prominent investors, including GQG, QIP, ADIA, and several leading US institutions, participated in the QIP. Domestic institutions such as Bandhan MF, Nomura, and 360 India Infoline also contributed to the successful outcome of the issue.
This milestone is particularly noteworthy as it follows the group's flagship company, Adani Enterprises Ltd, scrapping a ₹20,000 crore issue in February of last year. The decision to cancel the issue was directly related to the Hindenburg report, which alleged accounting fraud and stock manipulation within the Adani Group. While the group vehemently denied all accusations, the impact of the report was undeniable. Listed companies within the conglomerate witnessed a collective decline of over USD 150 billion in market value. Although the group has shown signs of recovery, the successful completion of the QIP is viewed as a pivotal moment, signaling a restoration of investor confidence in the tycoon's ability to navigate future challenges and drive growth.
Source: Adani Group raises $1 billion in share sale via QIP, first since Hindenburg row