Gautam Adani intention to raise at least $5 billion in equity tries to address two of the most common critiques thrown at the Indian tycoon’s growing empire: high debt ratios and a small investor base. After four years of eye-popping returns – some Adani Group shares have risen by more than 2,000% – Asia’s richest person is launching a fundraising effort that will most likely include a local share sale as well as buy-in from huge investment groups in the Middle East and Canada.


An equity injection of this size is expected to help the conglomerate deleverage. Bloomberg Intelligence anticipates a successful stock raise across the group, which will support the companies’ dollar bonds. The billionaire is seeking credibility in the face of criticism over his company’s rapid development from a typical port operator to a sprawling empire with businesses spanning media, cement, and green energy, which opponents say has increased leverage and financial complexity.

Gautam Adani may reduce debt ratios, widen his investor base, boost stock liquidity, and spark wider analyst coverage with this fundraising in one fell swoop for a company that has been shockingly under-covered despite outsized stock gains. However, questions remain about the types of investors Gautam Adani would be able to attract. And if they can be persuaded to invest at the exorbitant valuations his units sell at. 

Many questions

According to Bloomberg, Adani officials are targeting global sovereign and pension funds. These funds include Mubadala Investment Company, Abu Dhabi Investment Authority, and the Canada Pension Plan Investment Board. According to those acquainted with Gautam Adani’ plans, the total fundraising amount might reach $10 billion.

The equity ambitions are part of the 60-year-effort old’s to redefine himself on a global scale. Despite amassing more riches this year than any other entrepreneur, Gautam Adani has battled to overcome the idea that his rapid rise was propelled by Indian Prime Minister Narendra Modi’s support. CreditSights, a research firm, highlighted the group’s “elevated” leverage in September, and MPs have called for an investigation into some of the group’s investors.

Further, Adani Enterprises Ltd.’s board of directors will meet on Friday to examine funding possibilities. Adani Enterprises is valued at more than 160 times its projected earnings for the next year. According to Bloomberg data, Reliance Industries Ltd., India’s largest corporation by market value, stands at around 21 times.

Adani Enterprises

Adani Enterprises was added to India’s benchmark Nifty 50 index in September. Its upcoming share sale is expected to attract a number of passive funds. However, just increasing the number of strategic or passive investors is unlikely to enhance liquidity. The analyst assesses the company’s free float at roughly 10%, significantly lower than the advertised 27%.

A good outcome for the tycoon would be comparable to that of fellow Indian billionaire Mukesh Ambani. Ambani raised more than $27 billion in 2020 by selling holdings in Reliance Industries subsidiaries. The investors include Meta Platforms Inc. and Google’s parent company, Alphabet Inc. Gautam Adani’s anticipated share sale will be the first of many as the conglomerate expands into new industries.

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