Quant Mutual Fund Acquires Nearly Half of Adani Enterprises' ₹4,200 Crore QIP

Quant Mutual Fund has now emerged as the biggest investor in the recent ₹4,200-crore Qualified Institutional Placement (QIP) made by Adani Enterprises Ltd. The company has disclosed that this mutual fund house has scooped up almost 47% of the total issue by investing in QIP.

A Qualified Institutions Placement (QIP) is a fundraising method where companies issue equity shares to qualified institutional buyers (QIBs). This approach is mainly targeted at institutional investors like mutual funds, insurance companies, and pension funds, rather than individual retail investors. The shares offered in a QIP are often priced at a discount to the market rate, incentivizing institutional participation. The funds raised through this process can be used by companies for a variety of purposes, such as capital expenditures, debt reduction, or other corporate initiatives. 

The flagship Quant Small Cap Fund from Quant Mutual Fund seized the largest share and bagged 17.41% of the total QIP. Other funds on its books, including Quant ELSS Tax Saver, Quant Active, and Quant flexi-cap funds also took sizeable stakes with each garnering more than 7% of the issue.

Altogether, different schemes of Quant Mutual Fund have been allotted over 66.6 lakh shares at ₹2,962 per share, translating into an investment of over ₹1,973 crore. In other words, post-issue, this translates to a barely 0.58 per cent equity stake in Adani Enterprises.

Other notable QIP applicants were Winro Commercial (India) Ltd that subscribed for 12.5% valued at approximately ₹525 crore, and Tree Line Asia Master Fund (Singapore) Pte Ltd, which purchased 5.95%. SBI Life Insurance Co Ltd too got allocated 5.06%. It invested over ₹212 crore.

The company raised ₹4,200 crore by issuing 1.42 crore equity shares at ₹2,962 per share, a 4.99% discount from the floor price of ₹3,117.475 per share. The stock of the company has increased more than 27 percent in the last one year with the current market price of ₹3,104.75 and a market capitalisation of more than ₹3.5 lakh crore.

Earlier in the year, Adani Energy Solutions had raised around $1 billion through a heavily oversubscribed QIP. Global names like GQG, Blackrock, and Nomura, along with some domestic mutual funds such as SBI MF, HDFC MF, and Tata MF, were the notable investors in that offering.

The money raised from this QIP will be used for capital expenditures as well as to retire some of the debts of Adani Enterprises and its subsidiaries. In the issue process, the paid-up equity share capital of the company increased from ₹114 crore to ₹115.42 crore.

The QIP, which was conducted between October 9 through October 15, 2024 forms a part of overall capital raising strategy. The board had way back in the year approved the plan for raise of ₹16,600 crore, or about $2 billion. This shall be utilized to expand into sectors like airports, mining, data centers, and green hydrogen.