Block deal effect: Adani Enterprises surges 6%, Adani Green Energy falls 7%

Shares of Adani Enterprises and Adani Green Energy witnessed surge in volume on Wednesday in comparison to the average traded quantity. As many as 2.4 crore shares, or 2.11% of total equity of Adani Enterprises worth ₹5,762 crore, changed hands over the counter on the BSE and NSE via block deals today. Similarly, 5.2 crore shares, or 3.28% of total equity of Adani Green Energy worth ₹4,972 crore were sold through block deals to several investors. Though, the names of buyers and sellers were not ascertained immediately, but sources told that Rajiv Jain-led GQG Partners, Abu Dhabi-based IHC and other investors have purchased shares in the companies through open market transactions.

If true, this would be third round of investment by U.S.-based GQG Partners in the Ahmadabad-based conglomerate in the last four months. In March this year, GQG Partners had acquired minority stakes in four of the listed Adani Group companies - Adani Enterprises, Adani Ports and Special Economic Zone, Adani Green Energy, and Adani Transmission - for ₹15,446 crore. Later in May, the American equity investment firm had raised its stake in Adani Group by about 10% and had proposed to participate in the group’s future fundraising activities, terming it as "the best infrastructure assets available in India".

Driven by strong volume trade, Adani Enterprises share price gained as much as 6% to hit an intraday high of ₹2,419 on the BSE. Early today, the stock of the Adani Group flagship company opened at ₹2,315.95, up 1.5% against the previous closing price of ₹2,281.75. The stock trades 42% lower than its 52-week high of ₹4,189.55 touched on December 21, 2022, while it has risen 140% against its 52-week low of ₹1,017.10 hit on February 3, 2023.

As per a media report, the promoter entities of Adani group have pared a part of their stakes in these two companies to raise $1 billion, which will be used to pre-pay debt.

As of now, billionaire Gautam Adani-led Adani Group has repaid loans worth $2.65 billion to complete a prepayment programme to cut overall leverage, a move which is being seen as an attempt to boost investors’ confidence in the group companies post a short seller report.

In a credit note issued on June 5, Adani Group said it made a full prepayment of $2.15 billion of loans that were taken by pledging shares in the group's listed firms and another $700 million debt taken for the acquisition of Ambuja Cement. "The prepayment was done along with interest payment of $203 million," the Adani Group had said in a credit update.

The Ahmadabad-based conglomerate in its credit update said that the portfolio's combined net debt to EBITDA ratio has decreased from 3.81 in FY22 to 3.27 in FY23, and run rate EBITDA jumped to ₹66,566 crore in FY23 compared to ₹50,706 crore in FY22. The gross asset or net debt cover at the portfolio combined level improved to 2.26x in FY23 from 1.98x FY22.

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