Specialist in Indian Banking and Economic Research

Hemindra Hazari

Equity Bottom-Up

<ul>
<li>Rescinding of Rs 200 bn FPO deprives the company of much needed long-term funds</li>
<li>Company has a liquidity issue as this analyst estimates its short term borrowing exceeds its short term borrowing limit and it requires long term funds to bridge the gap</li>
<li>With foreign and private sector banks unwilling to increase exposure, the company needs to inject funds from founder entities, divest assets, reduce capex and improve working capital to infuse liquidity.</li>
</ul>


Rescinding of Rs 200 bn FPO deprives the company of much needed long-term funds
Company has a liquidity issue as this analyst estimates its short term borrowing exceeds its short term borrowing limit and it requires long term funds to bridge the gap
With foreign and private sector banks unwilling to increase exposure, the company needs to inject funds from founder entities, divest assets, reduce capex and improve working capital to infuse liquidity.


Who Will Now Fund Adani Enterprises’ Liquidity Gap?

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/adani-enterprises-ltd" target="_blank" data-smartkarma-citation="entities:245:1" rel="noopener">Adani Enterprises (ADE IN)</a> Further Public Offering ("FPO") expected to raise Rs 200bn has its first leg publicly complete with anchor investors taking Rs 59.849bn. </li>
<li>Noted shortseller Hindenburg Research published a <a href="https://hindenburgresearch.com/adani/" target="_blank" rel="noopener">long report</a> suggesting Adani Enterprises and indeed the Adani Group were over-priced according to fundamentals and were the result of  a "con."</li>
<li>Now the book build starts. Deal structure and Adani Group CFO comments continue to suggest that Liquidity is a Bug, not a Feature.</li>
</ul>


The Adani Enterprises (ADE IN) Further Public Offering ("FPO") expected to raise Rs 200bn has its first leg publicly complete with anchor investors taking Rs 59.849bn. 
Noted shortseller Hindenburg Research published a long report suggesting Adani Enterprises and indeed the Adani Group were over-priced according to fundamentals and were the result of  a "con."
Now the book build starts. Deal structure and Adani Group CFO comments continue to suggest that Liquidity is a Bug, not a Feature.


Adani Enterprises FPO Update:  Hindenburg, Anchors, and Righteous Indignation

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Adani Enterprises is looking to raise INR200bn (US$2.4bn) via a further public offering (FPO). Bookbuild will begin tomorrow (27th Jan 23) and last till the end of the month.</li>
<li>Adani Enterprises is the flagship company of the Adani Group. The group’s entities' stock performance over the past few years has made the founder one of the richest persons globally.</li>
<li>We have covered most aspects of the deal in our earlier note published. In this note, we talk about the recent updates and the deal pricing and structure.</li>
</ul>


Adani Enterprises is looking to raise INR200bn (US$2.4bn) via a further public offering (FPO). Bookbuild will begin tomorrow (27th Jan 23) and last till the end of the month.
Adani Enterprises is the flagship company of the Adani Group. The group’s entities' stock performance over the past few years has made the founder one of the richest persons globally.
We have covered most aspects of the deal in our earlier note published. In this note, we talk about the recent updates and the deal pricing and structure.


Adani Enterprises US$2.4bn FPO - Updates, Pricing, Structure, Anchor and Some More

<ul>
<li>The Adani names are seeing new news and commentary. SEBI is <a href="https://www.reuters.com/world/india/india-regulator-probing-some-adani-offshore-deals-possible-rule-violations-2023-04-01/" target="_blank" rel="noopener">probing offshore deals</a> for rules violations, SEBI filed an interim report Sunday with the Court, Cements are refinancing US$4bn.</li>
<li>GQG's Jain was interviewed by Bloomberg TV in NY saying he sees his Adani basket being a "multi-bagger in five years." </li>
<li>Assuming growth and margins equivalent to peer max rates, all profits reinvested, and 100% gain in stock price in 5yrs, NP CAGR=33%, 2028 EV/EBITDA average of four names is 29.4x. </li>
</ul>


The Adani names are seeing new news and commentary. SEBI is probing offshore deals for rules violations, SEBI filed an interim report Sunday with the Court, Cements are refinancing US$4bn.
GQG's Jain was interviewed by Bloomberg TV in NY saying he sees his Adani basket being a "multi-bagger in five years." 
Assuming growth and margins equivalent to peer max rates, all profits reinvested, and 100% gain in stock price in 5yrs, NP CAGR=33%, 2028 EV/EBITDA average of four names is 29.4x. 


GQG Calls Adani Names 5Yr "Multi-Baggers" - It Works at 30% EPS CAGR if You Torture the Numbers

<ul>
<li>Short-Term borrowing plays an important role in the Adani group</li>
<li>Rescinding of Adani Enterprises FPO and meltdown in share prices heightened liquidity concerns of the group</li>
<li>This analyst estimates the liquidity gap to be around US$ 8 bn for FY2023 which needs to be bridged by long-term funds and/or cash flow from operations</li>
</ul>


Short-Term borrowing plays an important role in the Adani group
Rescinding of Adani Enterprises FPO and meltdown in share prices heightened liquidity concerns of the group
This analyst estimates the liquidity gap to be around US$ 8 bn for FY2023 which needs to be bridged by long-term funds and/or cash flow from operations


Adani Group Has a Significant Liquidity Gap to Bridge

India

Adani Enterprises Limited is an international trading house that operates from offices in India as well as other countries. The Company is involved in coal mining, cargo handling and power generation.  Adani also trades in a large number of products including textiles, energy, metals and agricultural products.

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Adani Enterprises (ADE IN)

Who Will Now Fund Adani Enterprises’ Liquidity Gap?

Given the current political situation it is unlikely that the government banks will take a decision on their own to extend further short-term...

Hemindra Hazari

Adani Enterprises FPO Update: Hindenburg, Anchors, and Righteous Indignation

Adani Enterprises has priced/allocated the 30% of the Rs 200bn FPO going to anchor investors. Next is to Retail, HNWI, Employees, Funds. Liquidity...

Travis Lundy

Adani Enterprises US$2.4bn FPO - Updates, Pricing, Structure, Anchor and Some More

Adani Enterprises is looking to raise INR200bn (US$2.4bn) via a further public offering (FPO). We have covered most of the details in our prior...

Sumeet Singh

GQG Calls Adani Names 5Yr "Multi-Baggers" - It Works at 30% EPS CAGR if You Torture the Numbers

This is an update on the Adani Names where GQG Partners purchased a US$1.8bn stake from the Promoters themselves. They are up 25% in a month. Which...

Travis Lundy

Adani Group Has a Significant Liquidity Gap to Bridge

Analysis of the 7 listed Adani companies in FY2022 reveals a significant liquidity gap for FY2023 which needs to be bridged through long-term funds

Hemindra Hazari

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