Adani's Gulf-based backers desire a bigger share of the pie

It promises to be the mother of all follow-on public offers (FPOs). The most valuable company in the Adani group, Adani Enterprises, is all set to launch its much-awaited follow-on public offer (FPO), although the actual date is yet to be finalized. The Adani group has committed billions of dollars to long term projects in green energy, blue hydrogen, electrolysers etc. It is planning to raise Rs. 20,000 crore through the IPO. As per the latest news reports trickling in, some of the Adani's Gulf-based backers desire a bigger share of the pie. These include International Holding Company (IHC), which is likely to take a significant stake in the company through the FPO route.

There are likely to be a slew of sovereign and PE funds from the Middle East looking at the prospects of investing in the Adani Enterprises FPO, when it is launched. Apart from the International Holding Company (IHC), other major Middle East players like the Abu Dhabi Investment Authority, ADQ, Qatar Investment Authority and Mubadala are understood to be talking to the company for taking a significant stake in the company. It may be recollected that the stock price of Adani Enterprises in the last five years is up by nearly 18-times and remains one of the top wealth creators for the Indian market.

It is reported that the International Holding Company (IHC would be looking to invest up to Rs. 2,800 crore and pick up to 15% stake in the issue. This will also make IHC the single largest non-promoter shareholder of Adani enterprises from a foreign country. While details of the issue are yet to be announced, it is reported that Adani Enterprises may consider offering shares at a discount to the retail investors to make the issue more popular. Adani Enterprises will offer up to 35% of the issue size to the retail investors as per the statutory requirement. The FPO is expected to be launched later this month.

As of now, neither the promoters of the Adani group, nor the Middle East buyers have made any public statement and are playing their cards close to their chest. As of the last filing of shareholdings in September 2022, the Adani group currently owns 72.63% of Adani Enterprises while the remaining 27.37% is owned by public shareholders. The FPO will result in the promoter stake being diluted by a marginal 3.5%, which would still mean that they would hold more than 69% of the company. Adani not only acts as the holding company, but also as the incubator for all new business ideas. IT has business exposure to airports, ports, mining, agriculture, data centres, defence, cement, agriculture and warehousing.