Abu Dhabi’s International Holding Company PJSC will invest $ 2 billion as primary capital in three green-focused companies of Adani Group – Adani Green Energy, Adani Transmission and Adani Enterprises. The investment will happen through the preferential allotment route and the capital will be utilized for pursuing the growth of the respective businesses, further strengthening the balance sheet and for general corporate purposes, Adani Group said in a statement on Friday.
It said the board of three Adani Group companies approved the transaction on Friday. “IHC and Adani portfolio are committed to growing the business partnership across multiple strategic opportunities in India, West Asia and Africa,” the statement added.
Adani Enterprises, the group’s flagship firm, will receive Rs 7,700 crore by issuing preferential shares to IHC, while Adani Green Energy and Adani Transmission will receive Rs 3,850 crore each via the same equity instrument, the statement said. The Adani Group, however, did not say how much equity would IHC hold in the three firms.
The transaction is expected to be completed in a month, after all necessary approvals are obtained.
French energy major TotalEnergies already holds a 20% stake in AGEL.
This is a landmark transaction and marks a start of a wider relationship between the Adani Group and IHC and attracting further investment from UAE into India, ”Sagar Adani, executive director at AGEL, said.
Syed Basar Shueb, CEO and MD of IHC, said: “This will be a long-term investment in India as the country is driving much innovation globally, including the green energy sector. The opportunity to earn a compelling return on investment in green energy has never been greater. We are confident that Adani companies will play a significant role in unleashing India’s total green energy potential, reflecting positively on our shareholders’ commitment. ”
Spencer Ng, vice president, Moody’s Investors Service, said: “Today’s announcement by Adani Transmission regarding a Rs 3,850-crore equity investment from International Holdings Company is credit-positive. If completed as announced, the equity proceeds would help alleviate some of the downward pressure on Adani Transmission’s credit metrics caused by its substantial pipeline of growth projects over the next 3-4 years. ”
While AGEL is a renewable energy firm with a portfolio of 20.4 GW, ATL is the transmission and distribution business arm with a cumulative transmission network of 18,875 circuit km. AEL is the incubation arm that is focused on building emerging infrastructure businesses.