Indian tycoon Gautam Adani’s companies are seeking to issue shares for the first time since a short seller this year accused the billionaire’s group of accounting fraud and share price manipulation.
Two Adani Group companies will issue shares in a bid to raise up to $2.5 billion, the stock exchange said on Saturday, a sign the previously growth-hungry company is looking to return to business as usual in the wake of allegations from New York Hindenburg research in January.
Adani denied Hindenburg’s allegations in a 413-page rebuttal.
The market turmoil it triggered forced the group to cancel a $2.4 billion stock offering by flagship Adani Enterprises as its stock price plummeted. At the height of the market fiasco, Adani’s combined shares lost about $150 billion in value.
Its share price has risen slightly since then, although it remains well below its pre-selling level.
The board of Adani Enterprises, which comprises Adani’s coal trading and airport operations, on Saturday approved a plan to raise Rs 125 billion ($1.5 billion) by selling shares. The board of directors of Adani Transmission, an electric unit, approved a hike of 85 billion rupees ($1 billion).
Announcements were made in separate stock filings following board meetings.
The two companies said the shares can be sold through “qualified institutional placement” — a less regulated route than an open-market offering for companies to raise funds from institutions such as banks or trusts — or other methods. They did not indicate who the buyers were likely to be or what the funds would be used for.
Since Hindenburg released his report, Adani has tried to reassure investors by reducing debt, including repaying $2.65 billion in equity-backed loans and holding back non-core investments.
Adani Group said this week that capital spending “in new investment areas, outside the core, is undergoing a near-term reassessment.”
$1.9 billion sale of secondary shares to US-based investment firm GQG Partners in early March helped drive up its share price. In this month’s quarterly earnings, Adani Enterprises reported that after-tax profits more than doubled to Rs 7.8 billion ($95 million) compared to the same period last year.
But this week global index provider MSCI fell Adani Transmission and Adani Total Gas — Adani’s town gas business in partnership with France’s Total Energies — from its Indian equity benchmark.
MSCI reduced its assessment of the amount of shares in the two companies available to trade after the Hindenberg report and said on Friday the shares no longer meet minimum requirements for free float size.
A third listed company, Adani Green Energy, was expected to decide on a fundraiser on Saturday. But the renewable energy company said the meeting had been rescheduled for May 24, citing “certain needs”.
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