Adani Transmission, a company owned by Gautam Adani, has announced plans to raise capital through Qualified Institutional Placement (QIP) or other means. According to a regulatory statement released on Saturday, the electric power transmission business is seeking to raise up to Rs 8,500 crore, subject to shareholder approval. The funding comes months after a report from the US-based short-seller Hindenburg Group shook investor confidence, alleging share price manipulation and fraud. The report caused the group’s stock to plummet, prompting the Adani Group to undertake measures to alleviate investor fears about the conglomerate’s capacity to discharge its debt.
The Board has approved raising funds by issuing such number of equity shares of the company with a face value of Rs 10 each (equity shares) and/or other eligible securities or any combination thereof (hereinafter referred to as ‘securities’), for an aggregate amount not exceeding Rs 8,500 crore or an equivalent amount thereof through Qualified Institutional Placement (‘QIP’) or other permissible modes,” the company said in its filing.
A QIP is a capital-raising strategy that allows a publicly listed company to issue equity shares, fully and partially convertible debentures, or any other asset convertible into equity shares that is not warrants. Unlike an IPO, a QIP is only available to institutions or qualified institutional purchasers.
Adani Enterprises, Adani Green, and Adani Transmission, three Adani Group firms, have informed stock markets about the next board meeting to evaluate the financing request. However, Adani Green has rescheduled its board meeting until May 24.
According to a Bloomberg report earlier this week, the companies are planning to raise up to $5 billion to test investor confidence. The funding will assist in alleviating investor fears about the conglomerate’s capacity to discharge its debt.
In conclusion, Adani Transmission’s plans to raise capital come after a tumultuous few months for the Adani Group, which has faced allegations of share price manipulation and fraud. The funding is expected to alleviate investor fears about the conglomerate’s capacity to discharge its debt.
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