Adani boosts stake in Ambuja with $799 mn infusion
On 20 March, the edtech firm had issued a notice to its shareholders for the extraordinary general meeting
Billionaire Gautam Adani and his family invested $799 million to boost their stake in Ambuja Cements Ltd., in a sign of confidence that the cement maker is wellpositioned to benefit from the country’s infrastructure boom.
The capital infusion will bolster the family’s holding to 66.7%. This will also boost Ambuja’s annual cement production capacity to 140 million tonnes by 2028, help the company scale up operation and drive technological innovation, according to a company statement.
Cement is an increasingly crucial resource as PM Narendra Modi pushes to modernize India’s creaking infrastructure, while demand for real estate in the world’s most populous country grows.
The latest Adani investment comes through Harmonia Trade and Investment Ltd, a family-owned entity that acquired over 477 million convertible warrants from Ambuja Cements for ₹5,000 crore in October 2022—at 25% of the issuing price. Harmonia has now chosen to convert 212 million of the warrants into Ambuja stock at a price of ₹416.87 per share. Ambuja shares rose as much as 2.6% to ₹617 on Thursday. Adani bought a controlling stake in Ambuja Cements Ltd and ACC Ltd for $10.5 billion in 2022 in a deal financed by global banks.
Separately, Adani on Thursday said it has started operating the first unit of its $1.2 billion copper smelter, the group’s first foray into metals refining. Adani Enterprises, the conglomerate’s flagship company, commissioned the unit of the refinery in the western state of Gujarat, it said in a statement on Thursday.
The plant will be the world’s largest single-location custom smelter for the industrial metal. It will initially have capacity of 500,000 tonnes a year, and this will double in the second phase of the project.
The National Company Law Tribunal (NCLT) on Thursday refused to stay Byju’s extraordinary general meeting (EGM) that will be held today to augment the authorized share capital of the beleaguered edtech company, giving effect to its $200 million rights issue.
If Byju’s obtains a majority vote for its proposal to increase the authorized share capital, it can issue fresh shares to new investors, helping it to raise $200 million through a rights issue at a 99% cut from its peak valuation of $22 billion achieved in 2022.
Existing investors of Think & Learn, Byju’s parent, led by Prosus, had move NCLT Bengaluru to stay the scheduled EGM and block the rights issue fearing a near wipeout of their investments. On 20 March, Byju’s had issued a notice to its shareholders for the extraordinary general meeting, scheduling it for 29 March.
“EGM cannot be stayed, there are decisions, but the decision of the EGM can be challenged. We are not going to pass any order on record”, said a bench comprising justices K. Biswal and Manoj Kumar Dubey, posting the matter for final hearing on 4 April. Sudipto Sarkar, senior counsel for Prosus, argued: “I am not saying that order should be passed, or not. I am only saying the extraordinary general meeting should not be held. The court should hear the matter and decide whether it should go on or not. Kindly adjourn the meeting, not asking to nullify it. Litigants cannot bypass the tribunal and do things on their own. There is no dispute on the facts. The notice invoked cannot stand.”
Sarkar added that the petition cannot be rendered infructuous by one party by holding such EGM.
“The rights issues expires on 29 March, but voting will go on till 6 April, so the purpose of meeting fails. The rights issue is void and cannot be cured by EGM. Voting is not confidential, it is unusual”, he said. The investors alleged that not all shareholders have been served the EGM notice, in violation of rules.
Additionally, they argued, Byju’s did not allow them to inspect the documents to decide on how to vote for the EGM.
Senior advocate K.G. Raghavan, appearing for Byju’s, insisted that notice for the EGM had been sent to all the investors, and that opportunity was provided for the inspection of the said documents. “We are only holding this meeting for increasing our authorized capital. We have not set out anything. We are in fact in compliance with the order,” Raghavan said.
In another relief for the Bengaluru-based edtech firm, the Karnataka HC on Thursday extended the interim stay on the decision of an EGM convened by the company's investors to sack co-founder and chief executive officer Byju Raveendran, adjourning the matter to 28 May.
The infusion will bolster Adani’s holding to 66.7% and be used to push Ambuja’s production capacity
$22 bn The peak valuation achieved by Byju’s in 2022