Adani flagship seeks $1 billion via placement, terms show

Adani Enterprises Ltd. is trying to raise as much as 100 billion rupees ($1 billion) through a share sale to institutional investors as the ports-to-energy conglomerate led by billionaire Gautam Adani weathers legal challenges in the United States.

The firm opened the qualified institutional placement on Thursday and aims to offer up to 34.7 million shares to large investors. According to the terms of the deal obtained by Bloomberg News, they will be sold at an indicative price of 2,883 rupees each. The pricing is at a 9% discount to the stock’s Thursday close of Rs 3,177.50.

The company’s capital increase followed an agreement in May to pay $275 million to conclude an investigation by the Office of Foreign Assets Control. Separately, founder Gautam Adani and his nephew Sagar agreed to pay $18 million to the US Securities and Exchange Commission over allegations of misleading statements about Adani Green Energy.

Jefferies India Pvt., SBI Capital Markets Ltd., ICICI Securities Ltd. and IIFL Capital Services Ltd. are the lead managers of the deal, which has an option to increase its size.

The company intends to use the proceeds to finance its units’ capital expenditure needs, such as setting up a polyvinyl chloride plant and paying royalties for a road project. It may also use the funds to reduce debts of its solar energy, airport and copper units.

Shares of most Adani Group companies have risen this year. Its power, green energy and energy solutions units have each gained more than 50 percent this year, while the flagship firm has gained 42 percent, significantly outperforming India’s overall equity market.

Earlier Thursday, Adani Enterprises and Abu Dhabi International Holding Co. announced plans to invest $11.5 billion in an aluminum project in the eastern state of Odisha, further strengthening the Indian conglomerate’s bid to expand its presence in the metals sector.