International Holding Company (IHC), an Abu Dhabi-based conglomerate, is investing $2 billion (Rs 15,400 crore) in three companies of the Adani group through a preferential share allotment.
The Gautam Adani-led group on Friday said IHC will invest Rs 3,850 crore each in Adani Green Energy Ltd (AGEL) and Adani Transmission Ltd (ATL), and Rs 7,700 crore in Adani Enterprises Ltd (AEL).
While Adani Enterprises will issue 40 crore shares at a price of Rs 1,915.85, AGEL will issue 20 crore shares at Rs 1,923.25 apiece, while Adani Transmission will issue 15.6 shares for Rs 2,454.95 per share.
Post issue, IHC will have 1.41 per cent in Adani Transmission, 1.26 per cent in AGEL and 3.53 per cent in Adani Enterprises.
The boards of all the three companies met and approved the transaction on Friday.
The IHC investment is subject to shareholder and regulatory approvals and shall comply with the Sebi regulations.
This announcement led to shares of all the three companies firming up at the bourses. While the AGEL counter spurted 7.37 per cent to close at Rs 2,323.95 on the BSE, the Adani Enterprises share rose 3.44 per cent to Rs 2,170.70. Adani Transmission gained 3.41 per cent to Rs 2,542.
“IHC and Adani are committed to growing the business partnership across multiple strategic opportunities in India, West Asia and Africa,” the group said in a press statement.
According to Sagar Adani, executive director, AGEL, the landmark transaction marks the start of a wider relationship between the Adani group and the Abu Dhabi company, attracting more investment from the emirate to India.
The group said the three firms were market leaders in their business sectors and span its green portfolio. Further, every one of these three businesses has the core aspects of ESG (environmental, social and governance) woven into their operations.
The transaction is expected to be completed in a month after all necessary approvals are obtained.
The capital will be utilised for pursuing the growth of the respective businesses, further strengthening the balance sheet and general corporate purposes.
While AGEL is a renewable energy firm with a portfolio of 20.4 GW, ATL is the transmission and distribution business arm with a cumulative transmission network of 18,875 circuit kilometres. AEL is the incubation arm that is focused on building emerging infrastructure businesses, contributing to nation-building and divesting them into separate listed entities.
“This will be a long-term investment in India as the country is driving much innovation globally, including the green energy sector. The opportunity to earn a compelling return on investment in green energy has never been greater. We are confident that Adani companies will play a significant role in unleashing India's total green energy potential, reflecting positively on our shareholders' commitment’’, Syed Basar Shueb, CEO and Managing Director of IHC, said.
