Adani Energy Solutions Ltd (AESL) announced that it has successfully completed its $1-billion Qualified Institutional Placement (QIP), which is the largest in India’s power sector.
This QIP, worth Rs.8,373 crore, marks AESL’s first equity raise in the capital market since its demerger and listing from Adani Enterprises Ltd (AEL) in July 2015, a release from AESL said.
“This milestone underscores AESL’s prominent position as a leader in India’s energy transition solutions and highlights investors’ confidence in the country’s power sector outlook,” the release noted.
The transaction
The transaction was launched post-market hours on July 30, 2024 with a base deal size of Rs.5,861 crore ($700 million) and included a green shoe option to size up to Rs.8,373 crore ($1 billion). The QIP saw overwhelming demand, receiving bids of approximately 6x of the base deal size from a diverse group of investors, including utility-focused US investors entering India 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, raising the total issue size to USD 1 billion.
Use of QIP funds
The release noted that proceeds from the QIP will be utilized for:
- Investment in Transmission Assets: Building the bulk evacuation corridors for renewable power
- Smart Metering Business: Enhancing energy efficiency and improving network planning
- Debt Repayment: Reducing indebtedness
- General Corporate Purposes: Strengthening overall corporate activities
Strong investor confidence
“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. 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,” said Kandarp Patel, Chief Executive Officer of AESL.
Also read: Adani Energy Solutions’ transmission portfolio crosses 21,000-ckm mark
