Adani Energy Raises 8,373 Cr. via the Largest QIP in Indian Power Sector
Adani Energy Solutions Limited (AESL) mentioned in a press release dated 5th August 2024, that it has raised Rs. 8,373 crore via Qualified Institutional Placement (QIP). Press Release also states that the AESL QIP is largest in the Indian Power Sector till date. Shares were offered Rs. 976 apiece in this QIP issue.
Over 8.5 Cr. New Shares Issued, QIP Receives Enthusiastic Response
AESL issued fresh 8,57,89,959 equity shares, collectively amounting to Rs. 8,373 crore at the aforementioned issue price, for this QIP on 30th July, post-market hours. The QIP had a base deal size of Rs. 5,861 crore, which was offered alongwith a greenshoe option for Qualified Institutional Buyers (QIBs). As per Adani Energy’s press release the QIP received bids amounting to about 6 times the base deal size.
AESL’s QIP was the company’s first capital-raising tool using equity since its demerger from Adani Enterprises Limited (AEL) in July 2015.
INQ Holding Allotted Most Shares; CITIGroup Mauritius, Nomura Singapore Among other Top QIBs
Largest chunk of the issued shares by AESL’s QIP was 15.0003%, which was allotted to INQ Holding LLC, a global long-only investor. Another global long-only investor, CITIGroup Global Markets Mauritius Private Limited was issued 8.8852% of the new shares. Some SBI Funds also invested in the issue, and combined, they were allotted 7.9302% of the newly issued shares, while Nomura Singapore Limited ODI, a global long-only investor with 7.5002% of the freshly issued shares.
QIP proceeds to be used in 4 major areas
AESL will use the funds raised from the QIP for four major purposes. The first purpose mentioned by AESL is ‘Investment in Transmission Assets’, where the funds will be utilised for constructing green energy evacuation corridors. Apart from this, a portion of the funds will be redirected towards the company’s Smart Metering Business. The third cause for allocation of funds is repayment of debt. The fourth objective of raising these funds is to meet ‘General Corporate Purposes’.
Although, definitive allocation of the QIPs proceeds for each purpose hasn’t been disclosed by the company.
Brief Overview of Adani Energy Solutions’s CapEx Till FY-26
AESL to invest 17,000 Cr. In Transmission Business
AESL’s Power Transmission arm has earmarked a total CapEx of Rs. 17,000 crore for the period between FY-24 and FY-26.
In FY-24, AESL invested Rs. 4,300 out of the Rs. 17,000 crore CapEx in transmission projects. These projects include Sangod Transmission line, Line & substation augmentation projects, and Khavda Phase-III, KPS- 1. AESL plans on investing Rs. 7,000 crore during FY-25, and in FY-26 the firm will be spending Rs. 5,000 crore out of the total transmission business CapEx.
AESL has set a target to grow its transmission network to 30,000 circuit Km by 2030, from the current 20,509 cKm.
Through parallel licensing*, AESL’s Power Distribution arm will be expanding to new locations. The three new locations will be Gautam Buddha Nagar in Greater Noida, Navi Mumbai, and Mundra Taluka, which were mentioned in AESL’s Integrated Annual Report.
*Parallel License is a permission granted to private companies to supply electricity in a specific area alongside the existing state-run power distribution company.
Smart Meters’ Contracts Worth Rs. 27,000 Cr.
AESL’s smart metering business currently has contracts worth Rs. 27,195 crore, for 2.28 crore smart meters. During FY-24, AESL received orders for 21 million meters from DISCOMS in Maharashtra, Bihar, Andhra Pradesh, and Uttrakhand.
About Adani Energy Solutions Limited:- Headquartered in Ahmedabad, Gujarat, AESL has a revenue of Rs. 14,217 crore from operations. It has various domains in the energy sector, namely power transmission and distribution, cooling solutions, and smart metering. The Revenue from Operations for FY-24 was Rs. 14,217 crore.
