Adani Ent stock surges after filing papers to raise ₹20,000 cr via FPO

The shares of Adani Enterprises Ltd, the flagship company of mega-billionaire Gautam Adani, surged 0.15% to ₹3,622.5 on the NSE a day after the company filed initial papers for a follow-on public offer (FPO) with the capital market regulator SEBI (Securities and Exchange Board of India).

The stock opened a gap-down at ₹3,611.25 and surged to the intra-day high of ₹3,649.05. The Adani group stock touched its 52-week high of ₹4,189.55 on December 22, 2022. At the current share price, Adani group's market cap stands at ₹4.1 lakh crore, making it the 11th most-valued company in India.

The multi-bagger stock has delivered a return of 93.60% in the past year, while it has dipped 5.36% on a year-to-date (YTD) basis. In the past six months, the large-cap counter gained 50%, whereas it has fallen nearly 10.79% in a month.

The company has filed FPO papers with SEBI to raise around ₹20,000 crore via the FPO route. The decision came after its board approved a fundraising of ₹20,000 crore by way of a "further public offering through a fresh issue of equity shares by the company" on November 23, 2022. The details of the FPO are yet to be updated on the SEBI website, though the issue is likely to be partly paid-up shares with payment in tranches. A follow-on offer is when a company issues additional shares after an initial public offering (IPO).

The move is being seen as part of the company's strategy to diversify its shareholder base and reinforce credibility among investors. As per the latest shareholding pattern available on the BSE, the Adani family holds 72.6% stake in Adani Enterprises, while foreign institutional investors (FIIs) and mutual funds own 15.6% and 1.3%, respectively.

Goutam Adani-led group's plans to raise funds come after the Fitch group subsidiary, CreditSights said it remains "cautiously watchful" of the Adani group's growing expansion appetite, which is largely "debt-funded". Over the past few years, the Adani group has pursued an aggressive expansion plan that has pressurised its credit metrics and cash flows, the CreditSights report said, flagging the "elevated" leverage for Adani Green Energy and the risk of future acquisitions hurting the credit profile of Adani Ports and Special Economic Zone.

With the unprecedented rise in the market value of the group's companies, Gautam Adani's net worth has risen to $121 billion, making him the fourth richest man in the world, as per the Bloomberg Billionaire Index. He replaced Amazon founder Jeff Bezos to become the third richest person in the world in September 2022 before the e-commerce behemoth chief again took over him last year.

The combined market capitalisation of the Adani group has also exceeded $200 billion. For the July-September quarter of the current fiscal, the Ahmadabad-headquartered company reported a 117% rise in its consolidated profit at ₹461 crore, from ₹202 crore in the corresponding quarter last year. Its total income jumped 183% to ₹38,441 crore. The company is yet to announce its Q3 Fy23 results.