Indian billionaire Gautam Adani is courting sovereign wealth funds to raise roughly $5 billion in equity across his sprawling business empire and reduce leverage, people familiar with the matter said.
The network of companies owned by Asia’s richest person has reached out to top officials at firms including Mubadala Investment Co. and Abu Dhabi Investment Authority about investments, the people said, asking not to be identified as the information is private. Adani’s group has separately approached the sovereign funds of Qatar and Saudi Arabia, as well as pension funds such as Canada Pension Plan Investment Board, the people said.
It’s also gauging interest from firms linked to Abu Dhabi’s Sheikh Tahnoon Bin Zayed Al Nahyan, who oversees the Royal Group conglomerate and sovereign wealth fund ADQ, the people said. The Indian group has discussed raising as much as $10 billion, one of the people said.
Flagship firm Adani Enterprises Ltd. is considering issuing about $1.8 billion to $2.4 billion in new shares as soon as next year, Bloomberg News reported Tuesday. The $5 billion to $10 billion target would include the funds raised in the potential Adani Enterprises share issue, one of the people said.
The company’s board will meet Nov. 25 to discuss raising funds, Adani Enterprises said in an exchange filing Tuesday.
Deliberations are ongoing and no final decisions have been made, the people said.
The equity fundraising plans are part of what the Adani group calls its systematic capital management program, which has been in place since 2019 and under which the Qatar Investment Authority and Abu Dhabi-based International Holding Co. have previously invested in the Indian group. The fundraising will start with Adani Enterprises and is separate from the group’s plans to raise debt, one of the people said.
Representatives for Adani group, ADIA, ADQ, CPPIB, Mubadala and QIA declined to comment. Spokespeople for Royal Group and Saudi Arabia’s Public Investment Fund didn’t immediately respond to requests for comment.
Bankers urged the group to raise this much equity in order to improve the group’s debt ratios, two of the people said. The issuance would also boost the liquidity of the companies’ stocks, addressing two of the most frequent criticisms against the ports-to-power conglomerate. The research firm, CreditSights, had red-flagged the Adani Group’s “elevated” leverage in September. The conglomerate had pushed back against the report, calling their companies’ leverage ratios “healthy.”
Adani’s potential move mirrors a push by fellow Indian billionaire Mukesh Ambani, who raised more than $27 billion in 2020 from global investors by selling stakes in units of his conglomerate Reliance Industries Ltd.
--With assistance from Nicolas Parasie and Ben Bartenstein.
(Updates with detail on potential investors)
©2022 Bloomberg L.P.