According to persons familiar with the subject, billionaire Gautam Adani and his family want to invest $1 billion in the conglomerate's renewable energy unit as the group races to meet ambitious green targets despite facing maturing bonds next year.
According to persons involved with the conversations who did not want to be identified because the discussions are private, Adani Green Energy Ltd. is planning to issue preferred shares to the company's founders to fund expansion and refinancing needs. After the news surfaced, shares in Mumbai surged as much as 6.7%, bringing the year's loss to 20%.
An Adani Group spokesman did not immediately respond to a request for comment on the founders' investment. The company's board of directors will evaluate fundraising suggestions on December 26, including alternatives such as selling shares or convertible instruments, according to a filing Wednesday that provided no further specifics.
"An equity raise could boost deleveraging and lower refinancing risk, though governance concerns may linger," Sharon Chen, a Bloomberg Intelligence analyst, wrote in a December 15 report.
The company, which aims to have 45 gigatonnes of green energy capacity by 2030, also has $1.2 billion in bond maturities coming up next year, and it has already begun developing measures for repaying or refinancing those. Earlier this month, it also received a loan from eight banks. All of these measures highlight Adani Group's efforts to distance itself from the damaging claims of corporate malfeasance leveled by Hindenburg Research in January, which threw the ports-to-power conglomerate into turmoil for months.
Mode of Clawback
Despite vigorously disputing these charges, Adani companies' market worth dropped by more over $150 billion at one point. Since then, the company has been in clawback mode, lowering debt, attracting marquee investors, and securing US money for its Sri Lanka port project, restoring investor and lender confidence.
Last month, the group's stocks enjoyed a relief rise after India's top court stated it will not accept media stories on the conglomerate as "gospel truth" while deferring judgment on its investigation into Hindenburg's charges. Since the top court issued these observations at the end of last month, Adani Green's stock has increased by more than 65%.
