The billionaire Adani family is planning to sell up to 3 per cent of their stake in India’s second-largest cement firm, Ambuja Cements, to raise up to $500 million (Rs 4,197 crore) via block deals tomorrow, as per the terms of the transaction.
The sale of the shares is part of the family’s strategy to manage and balance its $125 billion-strong portfolio (including unlisted companies), accelerate investments across group companies, and induct long-term sovereign fund investors who are looking to invest in India’s growth story, according to banking sources.
As per the term sheet, Ambuja Cements shares are offered at a 5 per cent discount to the closing share price of Rs 632 on Thursday.
The Adani group did not comment.
The family currently owns a 70.33 per cent stake in Ambuja Cements, which it acquired from Swiss materials firm Holcim in May 2022. At the same time, the family, which owns a 71.71 per cent stake in Adani Power, may look at inducting global investors by selling a small stake of between 0.5 per cent and 3 per cent in the electricity generation firm, but no decision has been taken so far, said a source close to the development. “Most of the group shares are trading at 52-week highs, and there is demand from investors who want to invest a large sum, for example, $300 million, in the group shares and remain invested for the long term. So we will look at all options,” the source said.
While Adani Power has gone up by 28.4 per cent since January 1 this year to close at Rs 674 per share as of Thursday, the shares of Ambuja Cements are up 21.5 per cent to Rs 633 per share in the same period.
In the recent past, several long-term investors, including sovereign wealth funds like Qatar Investment Authority and GQG Capital, have invested in the group’s shares, with the most recent example being Adani Energy Solutions QIP when the entire green shoe option was exercised as demand was high, the source said.
The family wants to accelerate investments across group companies as they are in expansion mode with plans to invest $100 billion in the next decade. Hence, such portfolio balancing and churning will keep happening, the source said. The group will be investing $21 billion in the airport business and plans to list the business by FY28. The airport company is currently housed under AEL.
The fundraise by the family is separate from the share sale via QIP (qualified institutional placement) planned by the group’s flagship Adani Enterprises, which is planning to raise Rs 16,790 crore ($2 billion) in September.
During the roadshows in the last few weeks, the group’s top officials met investors across the world and received a good response for the share sale, said a source close to the development. Early this month, Adani group company Adani Energy Solutions (AESL), an electricity transmission firm, successfully raised Rs 8,373 crore ($1 billion) via a QIP — the largest in India’s power sector. The QIP was AESL’s first equity raise in the capital market since its demerger from AEL in July 2015.
AEL will be using the funds for its new projects as it expands capacity across its portfolio companies. Among its portfolio companies, Adani Green Energy will invest Rs 34,000 crore to expand its facilities in Gujarat’s Khavda facility alone.
The group recently shared its June quarter financial performance of the listed companies and announced an earnings before interest, tax, depreciation, and amortisation (EBITDA) surge of 32.87 per cent year-on-year (Y-o-Y) to reach Rs 22,570 crore, resulting in a trailing twelve-month (TTM) EBITDA of Rs 79,180 crore, marking a 45.13 per cent increase over the corresponding TTM of the previous year. The rise in EBITDA is largely driven by the group’s stable and resilient ‘core infrastructure’ platform, which constitutes over 80 per cent of the portfolio EBITDA and saw a remarkable 41.6 per cent growth Y-o-Y in the June quarter.
The contribution of AEL’s infrastructure businesses — utility (Adani Green Energy, Adani Power, Adani Energy Solutions, and Adani Total Gas) and transport (Adani Ports & SEZ) businesses — played a significant role in this growth, with EBITDA expanding by 70 per cent on a Y-o-Y basis.
First Published: Aug 22 2024 | 8:32 PM IST
