Amid a rout in stock prices caused by a US short seller’s allegations, Abu Dhabi-based International Holding Company (IHC) on Monday said it has invested AED 1.4 billion (USD 400 million) in the share sale of Adani Group’s flagship firm.
The investment in Adani Enterprises’ follow-on public offering (FPO) was made through its subsidiary Green Transmission Investment Holding RSC Limited, a company statement said. Most Adani group shares have fallen over the past three trading sessions after Hindenburg Research released a damning report that flagged concerns around debt and the use of tax havens at the ports-to-energy conglomerate. Almost USD 70 billion in market value has been wiped out of the Adani empire in three trading days.
The embattled group would use the IHC investment to showcase how strategic institutional investors continue to stay invested. Hindenburg released its report on the day Rs 20,000 crore FPO of Adani Enterprise opened for subscription for anchor investors. The FPO, which closes on Tuesday, has so far subscribed only 3 per cent. This is the second investment IHC has made in Adani Group after last year’s Dh7.3 billion (USD 2 billion) investment in three green-focused companies of the conglomerate, including Adani Green Energy, Adani Transmission, and Adani Enterprises.
“Our interest in Adani Group is driven by our confidence and belief in the fundamentals of Adani Enterprises Ltd; we see a strong potential for growth from a long-term perspective and added value to our shareholders,” said Syed Basar Shueb, Chief Executive Officer, IHC. IHC’s first investment of the year comes as the company continues to scale and diversify its investments locally and internationally, focusing on Europe, Africa, Asia, and South America Markets in 2023.
“The advantage of the FPO is the historical reference for the company’s earnings report, company’s management, business practices, and much data to bank on before making any investment decision,” Shueb explained. IHC continues to look ahead this year as its ambitious progression strategy gets well underway, with an expected further acquisition across four continents by the end of the year alone, focusing on a fast-growing economy, rapidly expanding equity markets, and top investment destination.
“We are watching the international market closely for new prospects, and we will continue exploring further opportunities outside our traditional market in 2023,” Shueb added. IHC aims to increase its global acquisition by 70 per cent in 2023, with the clean energy and food processing sectors being a key focus.