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Adani Energy Solutions Limited (AESL) announced the successful completion of its Qualified Institutional Placement (QIP) worth INR 8,373 crores (USD 1 billion), marking the largest QIP in India’s power sector. This achievement reinforces AESL’s leading position in the country’s energy transition and reflects strong investor confidence in the power sector’s growth prospects.
This QIP is AESL’s first equity raise in the capital market since its demerger from Adani Enterprises Limited (AEL) in July 2015. Since 2016, AESL has maintained consistent double-digit EBITDA growth, showcasing the effectiveness of AEL’s incubation model.
The transaction was launched after market hours on July 30, 2024, with an initial deal size of INR 5,861 crore (USD 700 million) and included a green shoe option to expand up to INR 8,373 crore (USD 1 billion). The QIP attracted overwhelming demand, receiving bids approximately six times the base deal size. Investors included utility-focused U.S. investors entering the Indian market for the first time, sovereign wealth funds, major Indian mutual funds, and insurance companies. This strong interest enabled AESL to fully exercise the green shoe option, bringing the total raised to USD 1 billion.
AESL has emerged as a key player in India’s energy transition, focusing on several critical areas:
Renewable Power Transmission: Investments in projects like Khavda in Gujarat and Rajasthan for bulk renewable power evacuation.
Renewable Power Penetration: Supplying 37% renewable power in Mumbai with plans to increase this share.
Energy Efficiency: Leading India’s smart meter installation program and collaborating with industrial and commercial establishments on efficiency improvement initiatives.
Cooling Solutions: Reducing energy intensity through innovative Cooling as a Solution (CaaS) offerings.
Dispatchable Renewable Energy: Delivering reliable renewable energy solutions to commercial and industrial customers as a preferred retail energy partner.
The funds raised through the QIP will be used for several strategic initiatives:
Investment in Transmission Assets: Developing bulk evacuation corridors for renewable power.
Smart Metering Business: Enhancing energy efficiency and improving network planning.
Debt Repayment: Reducing overall debt.
General Corporate Purposes: Strengthening corporate activities.
“India’s robust investment cycle and rising power demand are positive indicators for the power sector. The strong interest from institutional investors reflects their commitment to and belief in India’s energy transition, in which AESL plays a pivotal role,” said Mr. Kandarp Patel, CEO of AESL. “AESL is revolutionizing the delivery of electricity to end consumers in a reliable, affordable, and sustainable manner, contributing significantly to India’s energy transition. The overwhelming response to our QIP reflects the strong confidence that investors have in our robust business model, execution capabilities, and effective capital allocation strategy, driving strong growth and exceptional shareholder value.”
Advisors and Managers:
Advisor to AESL: Cantor Fitzgerald & Co.
Book Running Lead Managers: SBI Capital Markets Limited, Jefferies India Private Limited, and ICICI Securities Limited.
Legal Counsel to AESL as to Indian law: Cyril Amarchand Mangaldas.
Legal Counsels to the Book Running Lead Managers as to Indian law and international law: Trilegal and Latham & Watkins LLP, respectively. |
