Adani Enterprises to Raise $2 Billion as Paytm Denies Stake Sale Rumors
News Mania Desk/Agnibeena Ghosh/29th May 2024
Adani Enterprises announced on Tuesday that its board has approved raising up to 166 billion rupees ($2 billion). The flagship firm of the Adani Group plans to raise funds through the issue of shares or other securities via qualified institutional placements or other permissible modes, according to an exchange filing. The company has not specified the reason for the fundraising or the price at which the securities will be issued.
This fundraising comes a day after Adani Energy Solutions announced plans to raise up to 125 billion rupees through similar means. Business news website Moneycontrol reported earlier this week that the two companies are collectively planning to raise between $3.5 billion and $4 billion.
Adani Enterprises recently reported a nearly 38% drop in profit due to weak performance in its roads segment and higher expenses. Despite this, shares of Adani Enterprises rose by 0.12% on Tuesday and have gained 16% year-to-date.
In related news, India’s digital payments firm Paytm has denied rumors of a stake sale to the Adani Group. Reports suggested that Paytm CEO Vijay Shekhar Sharma had visited Gautam Adani, the billionaire chairman of the Adani conglomerate, to finalize the contours of a deal. However, both Paytm and the Adani Group have denied these claims.
“We hereby clarify that the abovementioned news item is speculative and the company is not engaged in any discussions in this regard,” Paytm stated. A spokesperson for the Adani Group also denied the rumors, calling them “baseless” and “untrue.” Sharma, who owns 9.1% of Paytm in his personal capacity and another 10.3% through Resilient Asset Management, did not immediately respond to requests for comment.
Despite the denials, Paytm’s shares surged to the exchange-allowed maximum of 5%, while shares of Adani Enterprises also saw a slight increase. Paytm has faced significant challenges recently, losing roughly half its market value in the past four months after shutting its banking unit due to regulatory issues.
The fundraising efforts by Adani Enterprises highlight the company’s strategy to strengthen its financial position and invest in future growth opportunities. As one of India’s largest conglomerates, Adani Group’s ability to raise significant capital reflects investor confidence in its long-term prospects. However, the denial of the Paytm stake sale rumors indicates the importance of clear communication and transparency in maintaining market stability.
In conclusion, Adani Enterprises’ plan to raise $2 billion demonstrates its commitment to securing funds for future expansion and addressing current financial challenges. Meanwhile, the swift denial of Paytm stake sale rumors underscores the need for accurate information and transparency in corporate communications. As both companies navigate their respective challenges, their actions will continue to be closely watched by investors and market analysts.
