Abu Dhabi’s IHC to invest $2 bn in three Adani group cos
MUMBAI: Adani group on Friday said Abu Dhabi’s International Holding Co. PJSC (IHC) will invest a total of $2 billion in three of its group companies— Adani Green Energy Ltd, Adani Transmission Ltd and Adani Enterprises Ltd.
IHC will invest ₹3,850 crore in Adani Green, ₹3,850 crore in Adani Transmission and ₹7,700 crore in Adani Enterprises to hold 1.26%, 1.41% and 3.53% stakes, respectively.
Adani group will issue shares to IHC in a preferential allotment at ₹1,923.25 apiece for Adani Green, ₹1,915.85 for Adani Enterprises and ₹2,454.95 for Adani Transmission.
The capital will be used to pursue the growth of respective businesses, strengthen balance sheet further and for general corporate purposes, Adani group said in a statement. The investment is subject to shareholder and regulatory approvals, and the transaction is expected to be completed in a month, after all approvals are in. “We are committed to the vision and values of investment in sustainable infrastructure, green energy and energy transition. This is a landmark transaction and marks a start of a wider relationship between The Adani Group and IHC and attracting further investment from UAE into India,” said Sagar Adani, executive director of Adani Green Energy Ltd. Shares of Adani Enterprises closed trading at ₹2,170.70, up 3.44% on the BSE, while shares of Adani Transmission and Adani Green closed 3.41% and 7.37% higher at ₹2,542 and ₹2,323.95, respectively.
The three firms will hold extraordinary general meetings on 3 May to seek shareholder approval for the share sale.
IHC was founded in 1998, as part of an initiative to diversify and grow non-oil business sectors in the UAE. In 2021, its total assets reached AED87 billion while total revenue grew 303% reaching AED28,562 billion for the same period.
“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,” said Syed Basar Shueb, CEO and managing director of IHC.
Rating agency Moody’s in a note said that the equity investment from IHC will be creditpositive for Adani Transmission.
“Today’s announcement by Adani Transmission regarding an ₹38.5 billion equity investment from International Holdings Company is credit positive. If completed as announced, the equity proceeds would help alleviate some of the downward pressure on Adani Transmission’s credit metrics caused by its substantial pipeline of growth projects over the next 3-4 years,” said Spencer Ng, vice-president, Moody’s Investors Service.