‘We want to maximize HNI, retail interest in Adani FPO’

Jugshinder Singh, Chief Financial Officer, Adani Group, said, “The FPO is aimed at maximizing the retail and HNI categories as they are inter-generational investors, unlike mutual funds or domestic institutional investors, who have much less horizon for investment ” Large family offices which can also participate as institutions, hence need not participate as HNIs. If they participate as institutions, it gives us more space for HNIs and regular investors, and allows us to have more HNI and retail participation.” He said when asked about the interest shown by institutional firms.

“Having a core infra portfolio, these companies will be massively valued, but their value tends to grow over time. If you look at Adani Transmission, the earned value over a period of nine years; We started in 2012. Adani Green, we started incubating in 2011, and now the value is emerging. That’s why we need investors like that.”

To attract retail investors, Adani Enterprises will offer additional discounts 64 per partly paid-up share above the cut-off price. Price range has been set for the FPO running from January 27-31 3,112-3,276.

He added that mutual funds have monetized less than 2% of Indian household wealth, allowing groups to access a larger share of savings. He said that it is engaged in reaching out to domestic investors for the last three years.

“We have been running roadshows to reach out to domestic investors in cities: Delhi, Kolkata and Surat for five years, and next month, we will reach out to Rajkot to increase their count as shareholders in our group vertical. We aim to have 10 million retail investors. I am told by some investors that at the roadshow, they are seeing heavy interactions between corporate and domestic investors, similar to what Dhirubhai Ambani will do on outreach programs for domestic investors after decades.”

Taking a dig at the hefty valuations of group companies for potential retail investors, Singh said: “High equity valuation means people value our growth and it lowers our risk premium, which in turn lowers our utility.” will drive business value.”

“We think that in all infra like airports, we can reduce tariffs and compete with the best like in Sydney,” he said.

after 20,000-crore proposed FPO, the stake of retail investors in Adani Enterprises will increase from around 1.4% to over 3%, while promoter shareholding will decline by 3.6 percentage points.

Shares of Adani Enterprises have rallied 174% from their 52-week low in less than 10 months. 4189.55 on 21 December. the stock has since corrected 3,456 on 20 January and Rs.

On why brokerages avoid including Adani group companies in their coverage universe, Singh said utility businesses are not widely tracked by analysts. But, this will change over time, he said.

Group to invest in follow-on public offer 10,869 crore for the capital expenditure requirements of the company’s subsidiaries for green hydrogen ecosystem projects, construction of existing airports and greenfield expressways, while The Rs 4,165 crore will be used to repay debt partly or fully as well as for three subsidiaries – Adani Airport Holdings Ltd, Adani Road Transport Ltd and Mundra Solar Ltd. The rest will be used for general corporate purposes, according to the offer document.

The group is also confident that its green hydrogen business will be operational in four years. “We believe that by 2026, hydrogen will be at an operating cost of 25-30 cents. Depending on the rate of return required, we will sell it for between $1.80 and $2.30 per kg, which is less than India’s LNG import cost . Therefore, already it will compete without any government subsidy.” Singh said.

The group has invested $1.6 billion in the hydrogen ecosystem and signed an MoU with French energy major Total. She said she would invest 25 per cent equity in the business.

He said that the Adani group is also looking at various partnerships for the airport business.

“We have entered into a joint venture in the duty free zone. In airports, you have specific elements that address a specific consumer base, and we are looking at other JVs in the fuel services and public entertainment space,” Singh said.