IHC to invest $2 bn in Adani Group’s green portfolio
- Abu Dhabi-based conglomerate International Holding Company will invest USD 2 billion in three green-focused companies of Adani Group, helping tycoon Gautam Adani’s units fund expansion plans.
Adani Enterprises Ltd, the group’s flagship firm, will get Rs 7,700 crore (USD 1.02 billion) by issuing preferential shares to IHC, while Adani Green Energy Ltd (AGEL) and Adani Transmission Ltd (ATL) will receive Rs 3,850 crore each via the same equity instrument, the group said in a statement.
It, however, did not say how much equity will IHC will hold in the three firms.
French energy giant TotalEnergies already holds 20 per cent in AGEL and IHC’s interest reflects global investors’ eagerness to partake in a piece of Adani Group.
“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.
The boards of AGEL, ATL and AEL met and approved the transaction on Friday.
The investment is subject to shareholder and regulatory approvals and shall comply with the Sebi regulations.
“IHC and Adani portfolio are committed to growing the business partnership across multiple strategic opportunities in India, the Middle East and Africa,” the group said.
The three Adani companies – AGEL, ATL and AEL – are market leaders in their business sectors and span the Adani Group’s green portfolio. Every one of these three businesses has the core aspects of ESG woven into their operations. This investment is a testament to the IHC’s and the Adani Portfolio’s shared vision and commitment to investing in sustainable companies that are leading the charge in the energy transition.
Syed Basar Shueb, CEO and Managing Director 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”.
The transaction is expected to be completed in a month after all necessary approvals are obtained. The capital will be utilised for pursuing the growth of the respective businesses, further strengthening the balance sheet and for general corporate purposes.
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 kilometres. AEL is the incubation arm that is focused on building emerging infrastructure businesses, contributing to nation-building and divesting them into separate listed entities.
Spencer Ng, Vice President, Moody’s Investors Service, said the announcement by ATL 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.
