Adani Energy Solutions raises $1 billion via QIP; details here

Adani Energy Solutions Limited (AESL) said on Monday that the company has raised ₹8,373 crore (USD 1 billion) through its Qualified Institutional Placement (QIP), the largest QIP ever in India’s power sector.

According to a press release, this QIP, AESL’s first equity raise since its demerger and listing from Adani Enterprises Limited (AEL) in July 2015, was launched post-market hours on July 30, 2024. The initial base deal size was set at ₹5,861 crore (USD 700 million), with a green shoe option that allowed an increase to ₹8,373 crore (USD 1 billion).

The offering received overwhelming demand, with bids approximately six times the base deal size from a diverse group of investors, including utility-focused US investors entering the Indian market for the first time, sovereign wealth funds, major Indian mutual funds, and insurance companies. This strong interest enabled AESL to fully exercise the green shoe option, successfully raising the total issue size to USD 1 billion.

AESL has established itself as a key player in India’s energy transition, focusing on several critical areas. The company has made significant investments in renewable power transmission projects, such as the Khavda project in Gujarat and various initiatives in Rajasthan, aimed at facilitating bulk renewable power evacuation. It has also achieved a 37 percent renewable power distribution in Mumbai and is working to expand this further.

Additionally, AESL is leading India’s smart meter installation program and collaborates with industrial and commercial entities to enhance energy efficiency. The company is also investing in reducing energy intensity through innovative Cooling as a Solution (CaaS) offerings and provides reliable renewable energy solutions to commercial and industrial clients.

The proceeds from the QIP will be strategically allocated to several key areas: investments in transmission assets to develop corridors for bulk renewable power evacuation, enhancement of the smart metering business to improve energy efficiency and network planning, debt repayment to reduce the company’s indebtedness, and general corporate purposes to bolster overall corporate operations.

“India’s robust investment cycle and rising power demand are positive indicators for the power sector. The strong interest from institutional investors reflects their commitment to and belief in India’s energy transition, in which AESL plays a pivotal role. AESL is revolutionizing the delivery of electricity to end consumers in a reliable, affordable, and sustainable manner, contributing significantly to India’s energy transition,” said Kandarp Patel, Chief Executive Officer of AESL.

He added, “The overwhelming response to our QIP reflects the strong confidence that investors have in our robust business model, execution capabilities, and effective capital allocation strategy, driving strong growth and exceptional shareholder value.”

The QIP was advised by Cantor Fitzgerald & Co., with SBI Capital Markets Limited, Jefferies India Private Limited, and ICICI Securities Limited serving as Book Running Lead Managers.

Legal counsel for AESL was provided by Cyril Amarchand Mangaldas, while Trilegal and Latham & Watkins LLP advised the Book Running Lead Managers on Indian law and international law, respectively.