Adani family plans $3.6B stake sale as group shares surge
What's the story
The Adani family, led by billionaire Gautam Adani, is planning to raise up to $3.6 billion (around ₹30,000 crore) by selling a portion of its promoter holdings in various Adani Group companies over the next 12-18 months.
This move is set to be the largest fundraising effort by the family, whose business range from airports to edible oil.
The decision comes in response to a significant increase in share prices of Adani Group firms over the past year.
Strategy details
Fundraising strategy aims to manage market volatility
The share sale is part of a broader strategy to rebalance the Adani family's wealth portfolio following a sharp rise in Adani Group firms' share prices.
An insider familiar with the family's fundraising plans told Mint that this move is not intended for debt repayment, as the family has no debts.
The strategy aims to manage market volatility associated with listed firms, with an anticipated 0.5-3% monetization of promoter stake in any given fiscal year.
Portfolio value
Adani family's wealth portfolio and stake sale
The value of the Adani family's holdings in listed group companies is estimated to be over ₹10 trillion (around $126 billion).
The immediate plan involves selling a stake worth ₹3,000-4,000 crore in Ambuja Cements Ltd, where the promoters hold a significant 70.3% share.
Potential buyers for this stake include US-based boutique investment firm GQG Partners LLC led by Rajiv Jain and at least four other entities, including three large bank-promoted firms.
Rebalancing approach
Adani family's rebalancing strategy and business value
As part of their wealth rebalancing strategy, the Adani family plans to support strategic growth by continuously strengthening balance sheets and facilitating transactions for long-term investors into group firms.
This approach aligns with global best practices comparable to large international groups.
A recent report by Barclays-Hurun India identified the Adani family as India's most valued first-generation family business, with a total worth of ₹15.44 trillion.
Asset distribution
Adani family's unlisted assets and share accumulation
The remaining wealth of the Adani family, beyond the ₹10 trillion held in listed stocks, is distributed across unlisted businesses.
These sectors include real estate, infrastructure, solar energy, wind energy, data centers, and defense equipment.
As share prices dipped earlier this year, the promoter family along with global investors accumulated shares of Adani Group firms.
Debt clearance
Adani Group's debt repayment and investor participation
The promoters have repaid about $2.55 billion to release a significant portion of their pledges, a move seen as an effort by the Adani Group to address investor concerns following allegations of over-leveraging by Hindenburg Research.
In addition to the promoters' efforts, several global investors including GQG, QIA, IHC and Total Energies have invested in Adani Group businesses.
Market impact
Adani Group's market performance and promoter holdings
On December 5, the 10 listed Adani firms alone contributed about 65% of the overall market gains.
The stocks have been mostly rising since then. The Adani family, as the promoters, holds 65-75% in most of the listed firms.
This leaves ample room for them to monetize their stakes if required, according to Securities and Exchange Board of India (SEBI) norms which mandate that listed firms should have a public stake of 25% or more.