Adani Family Announces $1 Billion Investment in Conglomerate's Green Energy Unit

Billionaire Gautam Adani and his family are set to infuse $1 billion into the conglomerate's renewable energy unit, Adani Green Energy Ltd., in a strategic move to achieve ambitious green objectives. The capital injection comes as the Adani Group aims to fulfill its green targets while managing upcoming bond maturities in the next year.

Sources familiar with the matter reveal that Adani Green Energy Ltd. intends to issue preferential shares to the company's founders to address expansion and refinancing requirements. The news sparked a positive response in the market, with shares rising by as much as 6.7% in Mumbai, reducing this year's loss to 20%.

While an official comment from Adani Group representatives is pending, the company's board is scheduled to evaluate fundraising proposals, including the potential sale of shares or convertible securities, on December 26, as mentioned in a filing on Wednesday.

Bloomberg Intelligence analyst Sharon Chen notes, "An equity raise could boost deleveraging and lower refinancing risk, though governance concerns may linger." The company, with a target of achieving 45 gigawatts of green energy capacity by 2030, faces bond maturities amounting to $1.2 billion next year. Adani Green Energy has already initiated plans for repaying or refinancing these obligations and recently secured a loan from eight banks.

These financial endeavors underscore the Adani Group's commitment to overcoming the aftermath of allegations of corporate fraud made by Hindenburg Research in January. Despite vehemently denying the accusations, Adani companies experienced a significant loss in market value. Since then, the conglomerate has adopted a clawback strategy, focusing on reducing debt, attracting marquee investors, and securing US funding for its Sri Lanka port project.

The group's stocks witnessed a relief rally last month after India's top court expressed reservations about considering media reports on the conglomerate as the "gospel truth" while reserving its verdict on the probe into Hindenburg's allegations. Adani Green's stock has surged more than 65% since the top court's observations at the end of last month, reflecting a positive trajectory for the conglomerate.

BS