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The Adani Group, a prominent Indian conglomerate, is embarking on a strategic move to raise a significant amount of capital from retail investors, aiming to diversify its funding sources and mitigate potential financial risks. The group plans to raise up to ₹40,000 crore (approximately $4.8 billion) over the next three to four years, according to a report by Moneycontrol. This initiative underscores the group's proactive approach to strengthening its financial foundation and enhancing its resilience in a dynamic economic landscape.
The group's first foray into this strategy was witnessed with Adani Enterprises, the flagship company, launching a public issue of secured non-convertible debentures (NCDs) worth ₹400 crore. These debt instruments, offering an attractive annual yield of 9.25-9.90 percent and maturing in two to five years, were fully subscribed within a day of their launch. This successful debut indicates strong investor confidence in the Adani Group's financial health and its commitment to delivering value to its investors.
Adani Enterprises' debt levels have witnessed a notable increase in the recent financial year. Its long-term borrowings climbed to ₹43,718 crore in FY24, compared to ₹32,590 crore in FY23, representing a significant year-on-year rise of 34.14 percent. Similarly, short-term borrowings also saw an upward trend, reaching ₹4,897 crore in FY24, compared to ₹4,244 crore in FY23. However, the company's cash segment exhibited positive growth, reaching ₹8,523 crore, compared to ₹5,539 crore in the previous year.
Despite the increasing debt levels, the group maintains a robust liquidity position, with cash reserves sufficient to cover more than 30 months of debt payments. This financial strength reflects the group's well-structured financial management and its ability to navigate market fluctuations. The move to raise funds from retail investors is strategically aimed at further diversifying its funding sources and reducing its reliance on a limited set of lenders. By tapping into the vast pool of retail investors, the group seeks to broaden its investor base and enhance its public visibility.
The group's efforts to engage with retail investors are expected to have a positive spillover effect on its equity base. The increased participation of retail investors is likely to attract further interest from institutional investors, contributing to a more robust and diversified investor profile. The move aligns with the group's broader strategic objective of fostering long-term growth and ensuring financial stability. As the Adani Group continues its expansion across various sectors, including infrastructure, energy, and logistics, the infusion of capital from retail investors will undoubtedly play a crucial role in supporting its ambitious growth trajectory.