Adani Enterprises Launches $500M QIP to Fund Strategic Infrastructure Projects and Debt Reduction

On October 9, Adani Enterprises announced the start of their QIP, which aims to generate $500 million. Depending on investor demand, the corporation may use a green shoe option to raise extra money. Adani Enterprises shares dropped by 2% to close at the day's low of ₹ 3092.10 on the BSE after the business authorized the sale huge shares to major investors through a qualified institutional placement (QIP) offering.

The main group company of Gautam Adani, Adani Enterprises Limited, intends to use the proceeds from the QIP to build a greenfield expressway, establish a polyvinyl chloride (PVC) plant, improve and develop certain existing airport facilities on the city side, and finance various capital expenditure requirements for specific projects under its new energy ecosystem.

According to an offer document the firm filed with stock markets, money from the QIP would also be used to pay off some of the obligations of its subsidiaries, namely those related to its airport business, Adani Airport Holdings Limited.
On October 9, Adani Enterprises unveiled their QIP in an effort to collect up to $500 million (around ₹4,200 crore). Depending on investor demand, the corporation may use a green shoe option to raise extra money. 

1. Capex for the ecosystem of new energy:

A portion of the QIP funds will be used by Adani Enterprises to finance capital expenditures for the establishment of a "Nacelles" and "Hubs" assembly facility as well as a "Rotor Blades" manufacturing facility by Adani New Industries Limited for its wind turbine manufacturing company. The firm intends to increase its assembly plant for "Hubs" and "Nacelles" as well as its production facility for "Rotor Blades" from 1.5 GW (gigawatts) per year to 2.25 GW, a project that would cost ₹1,131 crores. The funds will also be utilized by Adani New Industries Limited to establish a plant for the production of solar cells and modules.

In addition to the current 2 GW ingot-wafer production line, Adani is planning to establish a 4.25 GW solar module and 5.07 GW solar cell manufacturing plant. This project is expected to cost ₹7,657 crore in capital expenditures. Adani had a 4 GW cell and module line operating capacity as of June 30, 2024.

2. Airport capital projects: 

Adani Airport Holdings Limited has created capital projects of ₹12,442 crore for its six airports located in Thiruvananthapuram, Ahmedabad, Jaipur, Lucknow, Guwahati, Mangaluru, and Jaipur.

The airports corporation intends to use these funds for a number of airside, terminal, and cargo terminal enhancement projects, as well as for utilities and operational capital expenditures at these six airports and the expansion of fuel storage and distribution.

3. Building a greenfield expressway: 

As part of the dubbed Ganga Expressway, Adani Road Transport Limited is constructing a 151.7-kilometer access-controlled, six-lane (expandable to eight-lane) greenfield highway in the state of Uttar Pradesh, extending from Budaun to Hardoi. Two further sections of the Ganga Expressway, from Unnao to Prayagraj and from Hardoi to Unnao, are being built by Adani. These three road improvements would likely cost a total of about ₹16,575.84 crore.

4. Capital Expense for Establishing a PVC Plant: 

The company's affiliate Mundra Petrochem Limited is now building a petrochemical cluster in Mundra, Gujarat. Adani is now working on a polyvinyl chloride (PVC) project in this cluster with a capacity of one million metric tons (MMT) annually, with the option to expand to two MMT annually in later stages. With a capacity of 1 MMT annually, the first phase is now under development and expected to be put into service by December 2026. The PVC Project is anticipated to feature the ability to produce acetylene, calcium carbide, chlor-alkali, and PVC units.

5. Loan repayment:

It is also suggested that a portion of Adani Airport Holdings Limited's existing debts, which total ₹6,988.96 crore, be repaid using money from the QIP. These loans, which are due in March 2028, were obtained from Adani Properties Private Limited, a company within the Adani group.

To Summarize

Adani Enterprises launched a QIP on October 9, targeting $500 million, potentially raising more through a green shoe option. The funds will support capital expenditures in key areas: expanding green energy projects, including solar and wind manufacturing facilities; airport improvements across six cities; a greenfield expressway in Uttar Pradesh; a large-scale PVC plant; and debt repayment for Adani Airport Holdings. This investment aims to drive long-term growth across energy, transport, and infrastructure sectors.