Abu Dhabi’s International Holding Company (IHC) 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 utilised for pursuing the growth of the respective businesses, further strengthening the balance sheet and for general corporate purposes, Adani Group said in a statement.
It said the board of three Adani Group companies approved the transaction. “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 get £770 million by issuing preferential shares to IHC, while Adani Green Energy and Adani Transmission will receive £385 million 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.
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 IHC investment 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.”
