Abu Dhabi-based IHC to invest Rs 15,400 crores in three Adani companies

Abu Dhabi-based IHC to invest Rs 15,400 crores in three Adani companies

 

Adani Group stated its intention to expand its business relationship with IHC in India, the Middle East, and Africa.

 

International Holding Company, located in Abu Dhabi, would invest $2 billion (Rs 15,400 crore) in three of Adani Group’s green businesses: Adani Green Energy Ltd (AGEL), Adani Transmission Ltd (ATL), and Adani Enterprises Ltd. (AEL). All three firms are traded on the Bombay Stock Exchange and the National Stock Exchange (NSE).

AGEL will receive Rs 3,850 crore, ATL will receive Rs 3,850 crore, and AEL will receive Rs 7,700 from IHC. Within a month, the transactions should be finished. According to Adani Group, the funds would be utilised to drive company expansion and enhance the balance sheet for general business reasons.

In India, the Middle East, and Africa, Adani Group stated that it is dedicated to strengthening its commercial cooperation with IHC.

On Friday, the boards of AGEL, ATL, and AEL met to ratify the deal, which will be done by preferential allotment. The investment is contingent on shareholder and regulatory approvals and SEBI compliance.

“We are passionately dedicated to the common goal and principles of investing in sustainable infrastructure, green energy, and energy transformation,” AGEL Executive Director Sagar Adani said, describing the deal as “historic.” This historic agreement kicks off a more extensive engagement between the Adani Group and IHC, intending to draw further investment from the UAE into India.”

IHC’s CEO and Managing Director, Syed Basar Shueb, stated, “This is a long-term commitment to India, a global leader in innovation, notably in the green energy industry. There has never been a better time to invest in green energy and earn a substantial return on your investment. We are convinced that Adani firms will play a vital part in realising India’s full green energy potential, demonstrating our shareholders’ commitment to the cause.”

On Friday, the Adani group announced that Abu Dhabi-based International Holding Company PJSC (IHC) would invest $2 billion as primary capital in three Adani group firms – Adani Green Energy Ltd, Adani Transmission Ltd, and Adani Enterprises Ltd – under the preferential allocation mechanism.

Adani Green would get Rs3,850 crore, Adani Transmission will receive Rs3,850 crore, while Adani Enterprises will receive Rs7,700 crore from IHC. The Adani Group expects to complete the acquisition within one month of receiving all clearances. According to the release, many firms will be able to expand and enhance their balance sheets, and the funds will be used for general corporate purposes. Shareholders and regulatory bodies must provide their approval.

“Investing in sustainable infrastructure, renewable energy, and energy transition is key to our common vision and principles.” “This is a watershed moment in the Adani Group’s partnership with IHC, paving the way for more investment from the UAE into India,” said Sagar Adani, executive director of Adani Green Energy Ltd.

IHC would get a 3.53 per cent share in Adani Enterprises, a 1.41 per cent stake in Adani Transmission, and a 1.26 per cent stake in Adani Green due to the transaction.

IHC would be given Adani Green shares at Rs1,923.25 per share, while Adani Enterprises and Adani Transmission shares will be presented at Rs1,915.85 Rs2,454.95 per share, respectively.

Adani Enterprises shares closed at Rs2,170.70 per share, up 3.44 per cent on the BSE, while Adani Transmission and Adani Green shares finished at Rs2,542 Rs2,323.95 per share, respectively, up 3.41 per cent and 7.37 per cent.a

An extraordinary general meeting will be held on May 3 to seek shareholder approval for the sale of the IHC shares.

Founded in 1998, IHC seeks to diversify and strengthen non-oil commercial activities in the UAE. Assets of IHC amounted to 87 billion AED in 2021, and income reached 28,562 billion AED, an increase of 303 per cent.

Investing in green energy is a great way to earn a substantial return on your investment in India since the country is a worldwide leader in innovation. “IHC is confident that Adani’s firms will have a vital role in releasing India’s entire green energy potential, reflecting positively on our shareholders’ commitment to the industry,” said Syed Basar Shueb, CEO and Managing Director of IHC.

Moody’s credit rating agency rates Adani Transmission’s equity investment as high quality.

According to Spencer Ng, vice president of Moody’s Investors Service, the International Holdings Company’s equity investment in Adani Transmission is credit positive. 

If everything goes as planned, the equity funds will help ease some of the downward pressure Adani Transmission has experienced due to its substantial pipeline of expansion projects over the next 3-4 years.

edited and proofread by nikita sharma