Are Gulf-based funds rescuing Adani with $3 bn loan after investing in canceled FPO?
The Abu Dhabi Investment Authority and another state-owned Emirati fund Mubadala, were also lining up for subscribing to Adani's ambitious fundraiser.
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In May 2022, Abu Dhabi's sovereign wealth fund International Holding Company (IHC), had infused $2 billion into multiple Adani Group companies. Less than a year later, it swung in to rescue Adani's FPO by investing $400 million in it, when retail investors had been scared away, but that public offer was abruptly cancelled. Now the Adani Group has received a loan of $3 billion, which can be scaled up to $5 billion, from a sovereign fund that the conglomerate hasn't named.
Having invested heavily in Adani since months before the Hindenburg report and allegations of fraud hit the group, IHC was among other bidders from the gulf for its FPO. The Abu Dhabi Investment Authority and another state-owned Emirati fund Mubadala, were also lining up for subscribing to Adani's ambitious fundraiser. But as it became clear that the FPO was fully subscribed only thanks to QIIs, FIIs and ultra-rich investors, while retail share buyers stayed away, the follow-on offer was cancelled.
As of now Adani owes up to $41.1 billion in debt, and has raised the additional $3 billion in loans to strengthen its credit profile. It is eyeing to repay loans worth up to $790 million, picked up against its shares, by the end of March 2023. The Adani Group has been losing investor confidence ever since it was accused of inflating stocks via shell firms, which were later pledged to borrow more money.
The opacity regarding the sovereign fund, Adani's latest saviour, only adds to the mystique around the group already swimming in murky waters.
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