Billionaire Gautam Adani and his family are reportedly earmarking a substantial $1 billion investment for the conglomerate’s green energy unit, according to individuals with knowledge of the situation, aligning with the group’s swift pursuit of formidable environmental targets.
Billionaire Gautam Adani and his family are reportedly planning to infuse $1 billion into the conglomerate’s renewable energy unit, according to sources familiar with the matter. The move comes as the group races to achieve ambitious green goals and addresses upcoming bond maturities next year. Adani Green Energy Ltd. is exploring the issuance of preferential shares to the company’s founders for expansion and refinancing purposes, sources familiar with the discussions revealed on the condition of anonymity due to the private nature of the talks. Following the news, shares in Mumbai surged by up to 6.7%, reducing this year’s losses to 20%. A representative from the Adani Group refrained from providing an immediate comment on the founders’ investment.
The company board is set to review fundraising proposals on December 26, which may include options such as selling shares or convertible securities, as stated in a filing on Wednesday, although no further details were disclosed. Bloomberg Intelligence analyst Sharon Chen noted on December 15 that an equity raise could enhance deleveraging and reduce refinancing risk, though concerns about governance may persist.
Adani Green Energy, with a target of achieving 45 gigawatts of green energy capacity by 2030, faces bond maturities totaling $1.2 billion next year. Plans for repayment or refinancing are already in motion, including a recent loan obtained from eight banks. These initiatives underscore the Adani Group’s efforts to move beyond damaging allegations of corporate fraud made by Hindenburg Research in January, which triggered a crisis for the conglomerate. Despite vehemently denying these allegations, Adani companies suffered a market value loss exceeding $150 billion at one point.
In response to the crisis, the conglomerate has been in “clawback mode,” actively reducing debt, securing support from marquee investors, and obtaining funding for its Sri Lanka port project in the United States. The group experienced a relief rally in its shares last month after India’s top court emphasized that media reports on the conglomerate should not be considered the “gospel truth” while reserving judgment on the probe into Hindenburg’s allegations. Adani Green’s stock has surged more than 65% since the top court made these observations at the end of last month.The group’s renewables firm is set to receive an investment from its founders.
On December 26, the company board will convene to deliberate on fundraising initiatives.
Adani Green Energy Limited: Pioneering Sustainable Growth in India’s Renewable Energy Landscape
Adani Green Energy Limited stands as a prominent player in India’s renewable energy sector, boasting a substantial project portfolio of 20,434 MW. Founded in 1988 by the forward-thinking industrialist Mr. Gautam Adani, the Adani Group initially started as a commodity trading business, with Adani Enterprises Limited (formerly Adani Exports Limited) serving as its flagship company. Headquartered in Ahmedabad, India, the Adani Group has evolved into the nation’s largest and fastest-growing conglomerate, spanning diverse sectors such as Logistics, Power Generation, Renewable Energy, Agro, Solar Manufacturing, Real Estate, Defence & Aerospace, and more.
Adani Green Energy, established on January 23, 2015, as a subsidiary of Adani Enterprises Limited, focuses on various forms of energy, including wind, solar, hydro, thermal, and more. The company is engaged in establishing, building, developing, operating, and maintaining utility-scale grid-connected solar power, wind power, hybrid projects, and solar parks across 11 Indian states. With long-term Power Purchase Agreements (PPAs) in place with Central and State Government entities, the company has achieved operational projects totaling 5,410 MW, while an additional 15,024 MW is under construction.
Over the years, Adani Green Energy has expanded its reach and capabilities. It has ventured into joint ventures, signed strategic agreements, and continuously strengthened its operational and financial position. Noteworthy milestones include the acquisition of solar plants from Essel Group, Sterling & Wilson, SkyPower Global, and Hindustan Power projects.
In FY21, despite the challenges posed by the pandemic, Adani Green Energy commissioned several significant projects, including a 100 MW solar plant in Rajasthan, a 250 MW solar plant in Gujarat, a 125 MW solar plant in Uttar Pradesh, and a 100 MW wind plant in Gujarat. The company also completed the acquisition of a 205 MW solar portfolio from SB Energy Holdings Limited.
In FY22, Adani Green Energy continued its expansion and innovation efforts. It invested in India’s largest Bi-Facial & Tracker-based solar project, commissioned India’s first hybrid energy park, and mobilized USD 750 million through a bond issuance, setting a global benchmark. The company achieved a substantial leap in its aggregate capacity by acquiring Softbank’s 5 GW renewable energy portfolio.
As of March 31, 2022, Adani Green Energy operated 5.4 GW of renewable assets and was actively implementing around 15 GW of projects, resulting in a locked-in portfolio of approximately 20.4 GW. The company has set ambitious targets for the future, aiming to achieve 45 GW of green energy capacity by 2030.
