Adani Transmission Ltd plans to raise up to ₹3,000 crore through a soon-to-be-launched qualified institutional placement (QIP) offering, said two people aware of the development, requesting anonymity.
“Adani Transmission has been preparing to launch an equity share sale through a QIP offering. They have appointed five investment banks—Kotak Mahindra Capital, Citi, Credit Suisse, Edelweiss and JM Financial—to manage the share sale. They plan to raise around ₹3,000 crore, though they have an approval to raise up to ₹5,000 crore,” said the first person cited above. The company is looking to complete the fundraising by the end of this quarter, the person added.
QIP is a capital-raising tool through which listed companies can sell their equity shares, fully and partly convertible debentures, or any other securities, barring warrants, that are convertible into stocks, to a qualified institutional buyer.
In August, shareholders of Adani Transmission approved a plan to raise up to ₹5,000 crore through an equity share sale.
According to the second person cited above, Adani Transmission will use the capital for a variety of purposes, including debt reduction, capex and to invest in future acquisition opportunities.
“The company has not finalised any plans for equity raise. It continues to explore all possible options for accretive growth and for creation of long-term shareholders value,” an Adani Group spokesperson said in an email response to Mint’s queries.
Citi and Credit Suisse declined to comment.
Emails sent to Kotak Mahindra Capital, Edelweiss and JM Financial remained unanswered.
Adani Transmission is at present India’s largest private power transmission company with a cumulative network of around 12,923 circuit (ckt) km, out of which approximately 10,357 ckt km is operational, while 2,566 ckt kms are under construction.
Last year, Adani Transmission had acquired Reliance Infrastructure’s integrated business of retail electricity distribution, transmission and generation.
The business included Reliance Infra’s power generation units in Dahanu, power transmission network across Mumbai and Maharashtra, and the retail power distribution network in Mumbai suburbs.
The distribution business serves more than three million customers across 400 sq. km.
The acquisition marked the firm’s foray into large-scale electricity distribution.
In 2018, it had also signed agreements to acquire KEC International’s 100% stake in KEC Bikaner Sikar Transmission Pvt. Ltd which had operational transmission lines aggregating to 344 ckt km.
For the first half of 2018-19, it reported revenue of ₹1,658 crore, against ₹972 crore in the first half of the previous fiscal year.
The company reported profit of ₹265 crore in the first half of 2018-19, compared with profit of ₹151 crore in the corresponding period of the previous year.
On Tuesday, Adani Transmission shares fell 1.62% to ₹219.3 apiece on the BSE while the benchmark Sensex rose 1.3% to end the day at 36,318.3 points.
This article was first published on livemint.com