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Adani Energy Solutions is talking to different investors for its proposed qualified institutional placement and says it is receiving considerable interest from prospective investors.
The company had obtained board approval and shareholder approval in June to raise up to Rs 8,500 crore through a QIP.
“There are a lot of investors who have supported our various other ventures from time to time, so we are talking to them for support. Yes, there is a lot of interest. We are keeping it for the right time to launch,” MD and CEO Anil Sardana told businessline. In the recent past it received investments from Qatar Investment Authority, Abu Dhabi’s IHC, and GQG Partners.
The QIP will improve the company’s debt-to-EBITDA ratio, Sardana said. The company’s current debt is Rs 28,000 crore, while its average cost of funds is 9.2 per cent.
The company targets spending Rs 6,500-7,500 crore in FY24, but funds from the QIP would not be included in this limit. The capex for last year was Rs 6,000 crore.
Sardana said the company has been able to generate healthy cash flows. “We managed everything through internal resources,” he said.
The company recently changed its name from Adani Transmission in order to capture its growing presence in other aspects of the sector such as distribution and smart metering.
More licences
It is focused on growing its B2C distribution business, which it entered in 2018 by buying the Anil Ambani group’s power distribution business in Mumbai and the utilities in Mundra SEZ. Now it has applied for three more distribution licences in Greater Noida, Aurangabad and Nashik.
Sardana said the intention was to consolidate existing operations and expand into contiguous areas. In Noida, he said, the customer pays a high ceiling tariff for power and “therefore there is a lot of headroom for us to provide power”.
The company is awaiting the new electricity amendment act, which will obviate the need for parallel licences.
In the smart metering segment it is currently executing orders worth Rs 5,800 crore to supply 46 lakh smart meters; another 200 lakh meters are in the pipeline.
The company is also planning to offer ‘district cooling systems’ in Mumbai — a centralised cooling system covering several buildings or an entire area, where consumers can pay per use.
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