Adani Enterprises Ltd’s plan B, in case its ₹20,000-crore follow-on public offer (FPO) does not go through, is to postpone the growth and expansion programme for the next 6-9 months, Adani group Chief Financial Officer Jugeshinder Singh said on Sunday.
“As a policy we do not borrow, raise capital for general corporate purposes. We only raise capital for our assets,” Singh told businessline, adding that if the FPO fails to get subscribed, “we will postpone the growth programme for six to nine months and then do it later.”
By that time the businesses, for which the major share of the fundraising programme is earmarked, would be generating their own cash flows. He said there were no plans to either reduce the issue price or look for any other capital raising sources currently.
Of the total that the company is raising through the FPO, nearly ₹11,000 crore will be invested in businesses such as green hydrogen, airports and roads. Singh said all the new businesses under Adani Enterprises were already generating positive cash flows. The FPO programme is meant to accelerate that growth.
Last year the company had said that at the portfolio level, the company would be spending about $107 billion over the next 10 years. While each of the new businesses will be generating its own cash flows, Adani Enterprises as the holding company will be deploying $3.5 billion, of which $1 billion was raised last May and the remainder through the ongoing FPO.
With the price of the stock, having crashed nearly 20 per cent over the last two trading days, the stock is currently trading at a significant discount to the price band of ₹3,112-3,276. On the first day of the FPO on Friday, less than 1 per cent of the issue was subscribed.
Singh, however, asserted that he was confident of the FPO getting fully subscribed. He refused to speculate on the stock price when trading resumes on Monday but said that the company “will be the biggest wealth creation story over the next 30 years.”
One of the concerns that had been flagged by short-seller Hindenberg in its allegations was that many of the Adani group companies’ stocks were overvalued. The stock of Adani Enterprises itself has appreciated 11 times from its pre-Covid highs while its revenue has risen about 1.6 times.
Singh said that the company should not be viewed as a regular profit and loss play. “The value it creates is that of an incubator, its not earnings-led,” Singh said. Its value came from the cash flows and value created by the new industries under it such as data centres, green hydrogen, roads, financial services and Adani Wilmar.
He added that during the years 2026-2028 many of these new businesses would have reached a scale and size to be demerged and function independently.