Adani Enterprises to Return Abu-Dhabi-Based IHC’s $400 Million Investment

The Group withdrew fully subscribed FPO due to a plunge in its stock prices


(This article updates the previous story from January 31, 2023, to include Adani’s announcement of FPO withdrawal)

Adani Enterprises will return the recently announced investment of AED 1.4 billion (~$400 million) by Abu-Dhabi’s International Holding Company (IHC) into its three green energy-focused companies. The investment was part of the fully subscribed Follow-on Public Offer (FPO).

Adani Enterprises, in a statement, said that given the unprecedented situation and the current market volatility, the company aims to protect the interest of its investing community by returning the FPO proceeds to all its investors and withdrawing the completed transaction.

Adani Enterprises had planned to use part of the proceeds from the FPO to fund its clean energy initiatives, including green hydrogen projects.

Chairman of Adani Enterprises, Gautam Adani, said, “The market has been unprecedented, and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the Company’s board felt that going ahead with the issue would not be morally correct. The interest of the investors is paramount, and hence to insulate them from any potential financial losses, the Board has decided not to go ahead with the FPO.”

The investment is IHC’s first for 2023 as the company plans to diversify. IHC has now planned major investments across Europe, Africa, Asia, and South America. The company aims to increase its global acquisition by 70% in 2023, with a key focus on the clean energy and food processing sectors.

“Our interest in Adani Group is driven by our confidence and belief in the fundamentals of Adani Enterprises Ltd. We see a strong potential for growth from a long-term perspective and added value to our shareholders. The advantage of the FPO is the historical reference for the company’s earnings report, company’s management, business practices, and much data to bank on before making any investment decision,” Syed Basar Shueb, Chief Executive Officer, IHC, said after announcing the investment earlier.

With 422 subsidiaries and 82,000 employees, IHC aims to expand and diversify its holdings across a growing number of sectors, including real estate, agriculture, healthcare, food and beverage, utilities, industries, IT and communications, retail and leisure, and capital.

Last April, International Holding Company made an announcement sharing its plans to invest $2 billion in three of the Adani Group companies. IHC said that Adani Green Energy and Adani Transmission would receive $500 million each, while Adani Enterprises would receive $1 billion through a preferential allotment route.