Adani plans a $1 billion boost for the renewable energy arm

In a strategic move to accelerate its green energy ambitions, billionaire Gautam Adani and his family are set to inject $1 billion into Adani Green Energy Ltd. The conglomerate aims to meet its ambitious green goals as it grapples with the upcoming bond maturities in 2024.

Adani Green Energy Ltd. is considering issuing preferential shares to its founders to address expansion and refinancing requirements. Following the news, shares experienced a surge of up to 6.7%, mitigating this year’s loss to 20%.

The company’s board is slated to review fundraising proposals on 26 December 2023, exploring options such as share sales or convertible securities. The specifics of these proposals remain undisclosed, as mentioned in a filing on Wednesday, 20 December 2023.

Bloomberg Intelligence analyst Sharon Chen, in a note dated 15 December 2023, highlighted that an inquiry could fortify deleveraging efforts, potentially reducing refinancing risks. However, governance concerns may persist.

Adani Green Energy Ltd. has set an ambitious target of achieving 45 gigawatts of green energy capacity by 2030. As part of its financial strategy, the company is addressing bond maturities totaling $1.2 billion in 2024. Earlier in December, it secured a loan from eight banks as part of these financial strategies.

These strategic initiatives underscore Adani Group’s commitment to overcoming the fallout from allegations of corporate fraud made by Hindenburg Research in January 2023. Despite denying the accusations, Adani companies experienced a market value loss exceeding $150 billion at one point. In response, the company initiated a recovery strategy, reducing debt, attracting investors, and securing U.S. funding for its Sri Lanka port project.

Adani Group’s shares saw a relief rally in November following India’s top court’s statement that media reports should not be taken as the “gospel truth” in its probe into Hindenburg’s allegations. Since the court’s observations at the end of November 2023, Adani Green’s stock has surged more than 65%, reflecting renewed investor confidence in the conglomerate’s trajectory.